Question

Sharat borrowed rs 40000. The interest rate is 12% p.a. Find the amount he should repay after 2 ½ years if the interest is :
a) Compounded annually
b) Half yearly.
Pls answer this question correctly. ​

Answer 1

A=P(1+r)

t

Here,

A= Final Amount

P= Principal

r= Rate of interest

t= Time (years)

Given that amount is compounded half yearly,

1.5 years would include 3 cycles.

t=3

P=25000

r=

2

20%

=0.1 (∵r=20%p.a. so r = 10% half yearly)

∴A=25000(1.1)

3

= Rs. 33275