Question

If Rs 1000 is invested at 12% interest and interest is compounded half what will be the total amount at the end of the year

Answer 1

Answer:

12/100*1000=120

total amount =1000+120

=1120

Answer 2

Answer:

The total amount at the end of the year is Rs. 1123.60

Explanation:

Given the principal amount, P = Rs. 1000

Rate of interest, R = 20%

Time period, t = 1yr

Compounded half yearly, n = 2

Compound interest is the interest accrued on the interest on the principal amount.

The total amount with compound interest is given by

$A = P\bigg(1 +\dfrac{r}{n} \bigg)^{nt}$

where P is the principal amount, r is the rate of interest, n is the number of times interest is compounded, t is the per time period

Substituting the given values

$A = 1000\bigg(1 +\dfrac{12}{2\times 100} \bigg)^{2\times 1}$

$= 1000\bigg(1 +\dfrac{6}{100} \bigg)^{2}$

$=1000\big(1 +0.06} \big)^{2}=1000\times\big(1 .06} \big)^{2}$

$=1000\times1.1236=Rs.1123.60$

Therefore, the total amount at the end of the year is Rs. 1123.60.

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