Question

Find the difference between compound interest on rupees 8000 for 1 and half years at 10 percent per anum when compounded annually and semi-annually​

Answer 1

Answer:

It is given that

Principal (P) = 8000

Rate = 10% p.a. or 5% half-yearly

Period = 1

2

1

years or 3 half years

Case 1 - When compounded annually

A = P(1+r/100)

n

Substituting the values

=8000(1+10/100)(1+5/100)

By further calculation

=8000×11/10×21/20

= 9240

We know that

CI = A - P

Substituting the values

= 9240−8000

= 1240

Case 2 - When compounded half- yearly

A = P(1+r/100)

n

Substituting the values

= 8000(1+5/100)

3

By further calculation

=8000×21/20×21/20×21/20

=9261

We know that

CI=A−P

Substituting the values

=9261−8000

=1261

Here the difference between two CI=1261−1240=21