Find the compound interest on Rs. 625 for 1 year at the rate of 8% per annum payable half yearly.
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Answer:
Given details are,
Rate = 5 % per annum
Compound Interest (CI) = Rs 164
Time (t) = 2 years
By using the formula,
Let P be ‘x’
CI = A – P
164 = P (1 + R/100) n – P
= P [(1 + R/100)n – 1]
= x [(1 + 5/100)2 – 1]
= x [(105/100)2 – 1]
164 = x ((1.05)2 – 1)
x = 164 / ((1.05)2 – 1)
= 164/0.1025
= Rs 1600
∴ The required sum is Rs 1600
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