If the rate of interest is 10% p.a. and Rs. 1200 is lent at compound interest, payable half yearly, then what is the equivalent simple rate of interest for the first year?
10.25%
10.5%
10.67%
11.25%
None of these
Solution
$A=P{{\left( 1+\frac{r}{100} \right)}^{n}}=1200{{\left( 1.05 \right)}^{2}}$
$=1200\times 1.1025$
$=Rs.1323$
Again, $SI=1323-1200=123$
$\therefore 123=\dfrac{1200\times r\times 2}{2\times 100}$
$\Rightarrow ~~~~r=10.25%$