Question

principal = 10000 rate = 20% find compound interest after ½ years if compounded half yearly​

Answer 1

Solution: Principal for the first year =Rs 1000

$$SI\quad =\frac { P\times R\times T }{ 100 } \\ SI\quad for\quad 1st\quad year\quad =\frac { 1000\times 4\times 1 }{ 100 } \\ SI\quad for\quad 1st\quad year\quad =Rs\quad 40$$

Amount at the end of first year =Rs1000 + Rs 40 = Rs 1040. Principal for the second year = Rs1040

$$SI\quad for\quad 2nd\quad year\quad =\frac { 1040\times 4\times 1 }{ 100 } $$

$$SI\quad for\quad 2nd\quad year\quad =Rs\quad 41.60$$

Amount at the end of second year, $$Amount=Rs1040+Rs41.60=Rs1081.60$$

Therefore, $$Compound\quad interest=Rs(1081.60–1000)=Rs81.60$$

Remark: The compound interest can also be computed by adding the interest for each year.

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