Question

Find the amount on Rs.40000 if the interest is compounded half-yearly at 4%per annum for 1 ½ year

Answer 1

Answer:

Given

Principal (P) = Rs 40000

Amount (A) = Rs 46305

Period (n) = 1

2

1

years = 3/2 years

So half yearly, 2n = 2 × (3/2) = 3 years.

Let the rate of interest be r% p.a.

A / P = (1 + r / 100)

n

46305 / 40000 = (1 + r / 100)

3

(1 + r / 100)

3

= 46305 / 40000

On further calculation, we get,

(1 + r / 100)

3

= 9261 / 8000

(1 + r / 100)

3

= (21 / 20)

3

We get,

(1 + r / 100) = (21 / 20)

r / 100 = (21 / 20) – 1

r / 100 = 1 / 20

r = 100 / 20

We get,

r = 5

Therefore, rate of interest = 5% for half year.

So, 2 × 5 = 10% per annum.