Question

a person i n p e s t e d r s point 4000 in a bank if the rate of interest is 20% per annum and is compounded half yearly the amount one year will be​

Answer 1

Answer:

Step-by-step explanation:

Principal P=Rs.4,000. Since the interest is compounded half-yearly the number of conversion periods in 1  

1  

/2

​  

 

 years are 3. Also the rate of interest per conversion period (6 months) is 10%×  

2

1

​  

=5%(0.05 in decimal).

Thus the amount A  

n

​  

(in Rs.) is given by

A  

n

​  

=P(1+i)  

n

 

A  

3

​  

=4,000(1+0.05)  

3

 

=4,630.50

The compound interest is therefore Rs. (4,630.50−4,000)

=Rs.630.50.