Question

determine the rate of interest for a sum that becomes 216 /125 times of its self in 1 1/2 years compounded semi annually
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Answer 1

Step-by-step explanation:

Consider principal (P)=x

Amount (A)=

125

216

x

Period (n) = 1

2

1

years = 3 half years

Take rate percent per year = 2r% and r% half yearly

We know that

A/P = ( 1 + r/100)

Substituting the values

216x/125x=(1+r/100)

3

By further calculation

(1+r/100)

3

=216/125=(6/5)

3

So we get

1+r/100=6/5

r/100=6/5−1=1/5

By cross multiplication

r=100×1/5=20%

So the rate percent per year = 2×20=40%