8. Michael borrowed 16000 from a finance company at 10% per annum, compounded
half-yearly. What amount of money will discharge his debt after 1½ years
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Step-by-step explanation:
Principle = 16000
Rate = 10pcpa
No. of yrs= 3/2
A = P ( 1+R/100) raised to N
Therefore A = 16000( 1+ 5/100) raised to 3
16000 × 21/20 × 21/20 × 21/20
18,522
When the compound interest is compounded per 6 months the :-
N becomes 2 N
R becomes R/2
Therefore the amount = 18,522
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