Question

what amount is to be repaid on a loan of $12000 for 1 1/2 year at 10% p.a compounded half yearly

Answer 1

Here is your answer
Hope it helps you

Answer 2

Solution:

Method (1)

There are 3 half years in 1½ years.

Therefore, compounding has to be done 3 times.

Rate if intest → half of 10%

→ 5% half yearly

→ A = P (1 + R / 100)^n

→ 12,000 (1 + 5 / 100)³

→ 12,000 × 21/20 × 21/20 × 21/20

→ 13,891.50

Therefore, 13,891.50 is the answer.

Method (2)

→ Principal for first 6. months=12,000

→ Rate = 10%

→ I = 12,000 × 10 × 1/2 / 100 = 600

→ AP = P + I = 12,000 + 600

= 12600 is the principal of next 6 months.

→ 12,600 + 630

→ 13,230

→ I = 13230 × 10 × 1/2 / 100 = 661.50

→ A = P + I = 13230 + 661.50

→ 13,891.50

Therefore, 13,891.50 is the answer.

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