Question

calculate the C.I on rs 4000 for 1.5yrs at 10% per annum compounded half yearly​

Answer 1

Principal P=Rs.4,000. Since the interest is compounded half-yearly the number of conversion periods in 1

1

/2

years are 3. Also the rate of interest per conversion period (6 months) is 10%×

2

1

=5%(0.05 in decimal).

Thus the amount A

n

(in Rs.) is given by

A

n

=P(1+i)

n

A

3

=4,000(1+0.05)

3

=4,630.50

The compound interest is therefore Rs. (4,630.50−4,000)

=Rs.630.50.

Answer 2

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Principal P=Rs.4,000. Since the interest is compounded half-yearly the number of conversion periods in 1^1/2 years are 3. Also the rate of interest per conversion period (6 months) is 10%×1/2

=5%(0.05 in decimal).

Thus the amount An(in Rs.) is given by

An=P(1+i)n

A3=4,000(1+0.05)3

=4,630.50

The compound interest is therefore Rs. (4,630.50−4,000)

=Rs.630.50.