Question

Arif took a loan of Rs 80,000 from a bank. If the rate of interest is 10% per annum, find the difference in amounts he would be paying after 1 and a 1/2 years if the interest is compounded annually.
IN STEPS PLEASE.

Answer 1

Answer:

ANSWER

1) Compounded Annually :

P=Rs.80000

R=10% p.a.

T=1

2

1

years ⟹n=1+

2

1

Amount for 1st year.

A=P[1+

100

R

]

n

=Rs.80000[1+

100

10

]=Rs.88000

SI on Rs. 88000 for next 1/2 year

=Rs.88000×

100

10

×

2

1

=Rs.4400

Therefore, Amount = Rs.88000+Rs.4400 = 92400Rs.

2) Compounded half yearly :

P=Rs.80000

R=10% p.a.=5% per half year

T=1

2

1

years ⟹n=3

A=Rs.80000[1+

100

5

]

3

A=Rs.92610

Thus, the difference between the two amounts = Rs.92610−Rs.92400 =Rs.210