Govind borrows ₹18000 at 10% simple interest.He immediately invests the money borrowed at 10% compound interest compounded half-yearly. How much money does he gain in 1year?
Please do this question without the formula.
Please do it by calculating interest of every half year.
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Here is your answer:
P= ₹ 18000
R=10%
N=1 year
S.I=P*R*T/100
18000*10*1/100=1800 ₹
Compound Half yearly
P= ₹ 18000
N=2 half year
R=5%
A=P(1+r/100)^n
=18000(1+5/100)^2
=18000(21/20)^2
=18000*21*21/400
=45*441=19845 ₹
C.I =19845-18000=1845 ₹
Money he gained 1845-1800 = 45 ₹
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