Question

A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits rs. 1600 each on 1st january and 1st july of a year. At the end of the year, the amount he would have gained by way of interest

Answer 1

Answer:

₹ 121

Step-by-step explanation:

The compound interest calculated half yearly can be calculated by the equation

Amount = Principle * [ 1 + (Interest rate/2)/100 ]∧(2*no. of years)

Here one deposit is done on January 1st and the next on July 1st. So divide the question into two and calculate separately.

The Sum of 1600 deposited on January 1st will become

1600 * (1+(5/2)/100)∧(2*1) = 1681 at the end of the year.

therefore Interest = 1681 - 1600 = 81

The Sum of 1600 deposited on July 1st will become

1600 * (1+(5/2)/100)∧(2*0.5) = 1640 at the end of the year.

therefore Interest = 1640 - 1600 = 40

The amount would be gained as interest at the end of the year = 81 + 40 = 121