a man deposited rupees 50000 in in bank for 2 years At 10% compound interest annually. but one year after Bank changed the policy and decided to pay semi-annual compound interest at the same rate. What is the percentage difference between compound interest of first and second year? give reason with calculation.
Answers
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ANSWER:---------------
Principal,P` = Rs 55,000
Rate of Interest,R`= 102\dfrac{10} {2}
2 -10= 5%
Time,t` = 2×2\times2× 1= 2 years.
So,
Principle Amount Will be =>
A` =P‘(1+R100)t‘P`(1 + \dfrac{R}{100})^{t`}P‘(1+
100R) t‘
=> A`= 55,000(1+5100)255,000(1 + \dfrac{5} {100})^{2}55,000(1+
100. 5) 2
=> A`= 55,000(105100)255,000(\dfrac{105} {100})^255,000(
100---(105) 2
=>A` = Rs 60,637.5.
Hence the the compound interest in second case is
Rs (60,637.5 - 50,000)=Rs 5,647.5
So the change in Compound interest in second case
=Rs(5,647.5 - 5000)
=Rs 647.5
So the percentage of change in Compound interest in first and second years Will be =>
Change% = increaseininterestOriginalInterest×100%\dfrac{increase in interest}{Original Interest} \times 100\%
OriginalInterest
increaseininterest
×100%
=> Change% = 647.55000×100%\dfrac{647.5} {5000}\times 100\%
5000
647.5
×100%
=>Change% = 12.95%12.95 \%12.95%
Remember
A=P(1+R100)tA = P(1 + \dfrac{R}{100})^{t}A=P(1+
hope it helps:--
T!—;ANKS!!!