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A person deposited Rs 1,00,000 in bank X' for two years, at the rate of 10% compounded. But after one year, bank has changed the policy and decided to pay semi-annual compound interest at the same rate. What is the percentage difference between compound interests of the first year and second year? Give reason with calculation. Ans: 12.75%
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Answered by
2
Answer:
2.75%
Step-by-step explanation:
12.75-10=12.75 in 100000
Answered by
15
12.75% Increase
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The 1st year is simple interest, due to the fact that interest has not yet compounded.
Well first year interest is:
= 100000 × 10/100
= 1st year's interest : 10000
Now Total Principal: 100000 + 10000 = 110000
2nd year semi annual interest:
Formula P (1 + r/2/100)^(nt)
Final Amount= 110000 ( 1 + (10/2)/100)²
=110000 ( 1 + 5/100)²
= 110000 × 1.1025
Final Amount= 121275
2nd year Interest = 121275 - Principal
= 121275 - 110000
2nd year interest = 11275
Change in Percentage :
= (New value - Old value) ÷ old value × 100
= 11275 - 10000
= 1275 ÷ 10000 × 100
= 12.75% increase
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