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 is:
Answers
For january it will be calculated as
CI = P ( 1 + r/100)^t
P = 1600
r = 5% half yearly
t = 2 half years
= 1600 ( 1 + 5/100)^2
= 1600 (1 + 1/20)^2
= 1600 * 21/20 * 21/20
CI for january at the end if the year = 1764
For july it will be calculated as
CI = P ( 1 + r/100)^t
P = 1600
r = 5% half yearly
t = 1 half year
= 1600 ( 1 + 5/100)^1
= 1600 (1 + 1/20)
= 1600 * 21/20
= 1680
CI for july at the end if the year = 1680
total amount would be 1764 + 1680 = 3444
Answer:here p= 1600
R=5%
Time=1 1/2years
Compounded half yearly basis then
Rate become half
I.e 5%=1/20 in fraction
5%/2=1/40
Time become double in compounded half yearly
I.e 1 1/2= 3/2=3 years
So now r=1/40
T= 3 years
P= 16000
Ci for first year =40
Ci for 2nd year =41
Ci for 3rd year =42.025
Answer = 123.025