Question

find ci on rs 1800 for 5/2 year at 10 % compounded annually

Answer 1

Question is confusing, so possible three answers:

1. If year = 5/2 years i.e 2.5 years

Year 1: Using simple interest A = P + (PNR / 100) = 1800+1800*1*10/100 = Rs 1,980

Year 2: Using simple interest A = P + (PNR / 100) = 1980+1980*1*10/100 = Rs 2,178

Year 2.5: Using simple interest A = P + (PNR / 100) = 2178+2178*0.5*10/100 = Rs 2,286.9

So CI = A - P =  2,286.9 - 1,800 = Rs 486.9

2. If year = 5 years

CI formula:

A = P (1+R/100)^n

Here R = 1800; R = 10; n = 5

A = 1800 * (1+10/100)^5 = 1800 * 1.61051 = 2,898.92

CI = A - P =  2,898.92 - 1,800 = Rs 1,098.92

3. If year = 2 years

CI formula:

A = P (1+R/100)^n

Here R = 1800; R = 10; n = 2

A = 1800 * (1+10/100)^2 = 1800 * 1.21 = 2,178

CI = A - P =  2,178 - 1,800 = Rs 378