Biswa decided to save money for a trip. He was checking some investment options for saving, but his friend Kalia suggested to check if he is interested in compound interest. Biswa found a bank that offers 6% compound interest calculated on a half-yearly basis. To know in detail, Biswa planned to deposit Rs. 20000 each on 1st of January and 1st of July of that same year. But Biswa is not that great at Math! Can you help him know, what amount he would have gained through interest by the end of the year?
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Principal that Biswa give = Rs.20,000
Rate of Interest = 6%
Time = 1 year
Amount = ?
Since, compound is calculated on a half yearly basis, then the formula will be
A = P×(1+R/200)^2×time
=> A = 20,000× (1+6/200)^2×1
=> A = 20,000×103/100×103/100
=> A = 21,218
So, Amount of interest = Rs.21,218
And money that Biswa gained (C.I)= Amount–Principal
=Rs.21,218–Rs.20,000
= Rs.1,218
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