calculate the amount and compound interest by the simple interest method on 1,20,000 for 1 year at 16% p.a ccompunded half yearly
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Principal=Rs.20,000
Time =1 year compounded semi-annually
Rate=16%
As the interest is compounded semi-annually so the rate is divided by 2 and the time is multiply by 2
∴A=P(1+
2×100
R
)
T×2
⇒A=20,000(1+
100
8
)
2
⇒A=20,000×
100
108
×
100
108
⇒A=2×108×108
⇒A=Rs.23328
∴C.I=23328−20000=Rs.3328
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