Question

3. Find the C.I. on Rs. 6,950 for 3 years if the interest is payable half-yearly, the rate for the
first two years being 6% p.a. and for the third year 9% p.a.
[Ans. Rs. 1,589]​

Answer 1

Answer:

1589

Step-by-step explanation:

P = 6950, R = 6% = 0.06(Half-yearly), Time n = 2 years.

Then,

A = P(1 + r/2)²ⁿ

=> A = 6950(1 + 0.06/2)⁴

=> A = 6950 * (1.03)⁴

=> A = 7820

So,

P = 7820, R = 9% = 0.09, Time = 1 year

∴ A = P(1 + r/2)²ⁿ

=> A = 7820(1 + 0.09/2)²

=> A = 7820 * (1.045)²

Apply log on both sides.

log A = log{7820(1.045)²}

=> log A = log 7820 + log(1.045)²

=> A = 8539

CI = A - P

   = 8539 - 6950

  = 1589

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