Question

Sangeetha invested Rs. 20,000 at 8% per annum. If the compounded half yearly, then total

interest earned by Sangeetha at the end of the year is:​

Answer 1

Given :- Sangeetha invested Rs. 20,000 at 8% per annum. If the compounded half yearly, then total interest earned by Sangeetha at the end of the year is ?

Solution :-

we know that, when rate is compounded half yearly , time becomes 2 times and rate becomes half .

So,

• Principal = Rs.20000
• Rate = 8/2 = 4% per annum.
• Time = 1 * 2 = 2 years.

we know that, when rate is compounded annually,

• Amount = Principal * [1 + (Rate/100)]^(time)

Putting all values we get,

→ A = 20000[ 1 + (4/100)]²

→ A = 20000[ 1 + (1/25)]²

→ A = 20000(26/25)²

→ A = 20000 * (676/625)

→ A = Rs.21632 .

therefore,

→ Total compound interest = Amount - Principal =21632 - 20000 = Rs.1632 (Ans.)

Hence, total interest earned by Sangeetha at the end of the year is Rs.1632 .

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