Question

find the amount that David would receive if he invest Rs 8192for 18 months at 12 1/2% per annum the interest being compounded half yearly

Answer 1

Number of half years=3

Rate is mentioned in terms of per annum

Thus, it needs to be halved.

So, r= 12.5/2=6.25% or 25/4% per half yearly

Amount=p(1+r)^t

=8192(1+25/400)^3

=8192(17/16)^3

=4096*2(17^3)/4096. (since 8192=4096*2 and 16^3 =4096)

=2*17^3= Rs.9826