Question

Find the compound interest on rs 4000 at rate of 5%per annum for 1 1/2 years interest compounded half yearly​

Answer 1

Solution!!

The concept of compound interest has to be used here. The principal, rate of interest and time is given. We have to find the compound interest.

Principal (P) = Rs 4000

Rate of interest (R) = 5% = 2.5%

Time (n) = 1 1/2 years = 3/2 years

It is compound half yearly so, (3/2) × 2 = 3 years

Amount = Principal (1 + (R/2)/100)ⁿ

Amount = 4000(1 + (2.5/100))³

Amount = 4000(102.5/100)³

Amount = 4000(41/40)³

Amount = 4000 × (41/40) × (41/40) × (41/40)

Amount = 4 × (41/4) × (41/4) × (41/4)

Amount = 41 × (41/4) × (41/4)

Amount = Rs 4307.56

CI = Amount - Principal

CI = Rs 4307.56 - Rs 4000

CI = Rs 307.56

Hence, the compound interest is Rs 307.56