Question

find out the amount and compound interest on rs 8200 for 3 month at 20%per annum when the interest is compounded semi yearly

Answer 1

Compound interest accumulation factor :

(1 + i)ⁿ × p

P = principle amount = 8200

i = interest rate 20/2 = 10% since it is compounded semi annually

n = Time in years = 3/12 = 0.25 × 2 = 0.5 since it is compounded semiannually

Doing the substitution:

(1.10) ^ 0.5 × 8200 = 8200 × 1.04881

8600.242

Interest earned = 8600.242 - 8000 = 600.242

Rs 600.242