Question

the interest on on 20000 at the rate of 20% per annum for 1.5 years is compounded half-yearly is how much more than the simple interest earned on the same amount at the same rate of interest for the same period



The answer is 620​

Answer 1

Answer:

The formula to calculate the accumulated amount to compounded semiannually at rate r% on principal P in t years:

A=P(1+\dfrac{r}{200})^{2t}A=P(1+

200

r

)

2t

AS per given , we have

P= Rs 20,000

r= 20%

t= 1.5 years

Then,

\begin{gathered}A=20000(1+\dfrac{20}{200})^{2(1.5)}\\\\ A= 20000(1.1)^3=26620\end{gathered}

A=20000(1+

200

20

)

2(1.5)

A=20000(1.1)

3

=26620

Compound interest = A - P = 26620 - 20000 = Rs 6620

Formula for simple interest : I=\dfrac{Prt}{100}I=

100

Prt

, then I=\dfrac{20000\times20\times1.5}{100}=6000I=

100

20000×20×1.5

=6000

Difference = Compound interest- simple interest

= 6620-6000=620

Hence, the interest earned is Rs 620 more than the simple interest