Question

3. A sum was invested at 12% p.a., interest compounded semi-annually for 2 years. If simple interest on
the sum for 1 year is 960, find the compound interest on the sum for first year.​

Answer 1

Answer:

For the first year, P=Rs.2000,R=5%

so, I =

100

P×R×T

=

100

Rs.2100×5×1

=Rs.105

The amount after the second year =Rs.2100+Rs.105

=Rs.2205

Final amount =Rs.2205

Hence, Compound Interest = final amount - original amount

=Rs.2205−Rs.2000=Rs.205