Ram invested Rs. 50,000 at an interest rate of 8% per annum
compounded half yearly. What amount would he get (i) after 6 months
(ii) after 1 year.
Answers
Answer:
Given that, Vasudevan invested ₹ 60,000
For Compound Interest (C.I.)
A = P[1 + (r/100)]n
P = ₹ 60,000
n = 6 months and 1 year
R = 12% p.a. compounded half-yearly
where , A = Amount, P = Principal, n = Time period and R = Rate percent
(i) For easy calculation of compound interest, we will put Interest Rate as 6% half-yearly and n = 1.
Compound Interest to be paid for 6 months
A = P[1 + (r/100)]n
A = 60000[1 + (6/100)]1
A = 60000[(100/100) + (6/100)]
A = 60000 × (106/100)
A = 60000 × 1.06
A = ₹ 63600
(ii) Compound Interest to be paid for 12 months (1 year) compounded half yearly.
So, assume n = 2, r = 6%
A = P[1 + (r/100)]n
A = 60000[1 + (6/100)]2
A = 60000[(100/100) + (6/100)]2
A = 60000 × (106/100) × (106/100)
A = 60000 × (11236/10000)
A = 60000 × 1.1236
A = ₹ 67416