Question

A sum of ₹25000 invested at 8% p.a. compounded semi-annually amounts to ₹28121.60. Compute the time period of investment.

Answer 1

Time period of investment = 1.5 years.

Explanation:

Compound interest formula,

A = P (1 + r/n)^nt

P = 25,000

A = 28121.60

r = 8% = 8/100

n= 2

t = ?

Substituting the values in the formula, we get:

28121.60 = 25000 (1 + 8 / 200) ^2t

28121.60 / 25000 = (1 + 1 / 25) ^2t

28121.60 / 25000 = (26 / 25) ^2t

1.124 = (676 / 625) ^t

Solving we get t = 1.5 approximately.

Time period of investment = 1.5 years.