Question

Find the difference between the simple interest and compound interest on 16000 for 1 and a half years at 5 % per annum , compound interest being reckoned half yearly ??

Answer 1

$Sum\ with\ Simple\ Interest=Rs 16, 000(1 + 5/100 * 3/2)=Rs 17, 200.\\\\Sum\ with\ compound\ interest=Rs16,000 (1+2.5/100)^3=Rs17,230.25\\\\Difference=Rs\ 30.25$

Rate of interest for compound interest is  5/2%  for each of 6 months and there are 3 times when the interest is compounded in 1 1/2 years.