Question

In a savings bank account the bank offers an annual compound interest of
5% If the interest is added to the principal amount every 6 months, then how
much interest will Naresh get after 1 year If he deposited Rs. 1600/- in the
bank.​

Answer 1

Answer:

81

Explanation:

Given:

Annual compound interest = 5%

Interest is added to principal amount every 6months

Naresh deposited Rs. 1600/-

To Find:

How much interest will he get after a year

Solution:

Principal (P)= 1600

Rate (R) = 5%

Number of times interest applied per time period (n) = 2

Time period (t) = 1 year

Using Compound interest formula:

A = P( 1 + r/n )^nt

A = 1600( 1 + 5/100×2 )²

A = 1600( 1 + 1/40 )²

A = 1600( 41/40)²

A = Rs. 1681/-

Interest = Amount - principal

Interest = 1681 - 1600

Interest = Rs. 81 /-

Hence, 81 is the required interest he will get after 1 year.