Question

calculate compound interest on Rs.5500 over a period of 1 year 10% per annum if interest is compounded half yearly

Answer 1

We know that

compound interest = CI = P((1+i)^n - 1)

P = Principal Amount

i = Rate of interest Per Annum

n = Time

P = 5500 ; n = 1 year .. compounded half yearly..so 1 × 2 = 2 periods ; i = 10%

CI = 5500(1 + 10/100)^2 - 5500

= 5500(1 + 0.1)^2- 5500

=5500(1.1)^2 - 5500

=5500 (1.21) - 5500

=6655 - 5500

=1155