Question

what amount is to be repaid on a loan of rs 40000 for 2years at 20% per anumn compounded half yearly ​

Answer 1

ANSWER

As interest is compounded half yearly, so number of conversion periods in 121 years is 3, So n=3

rate for half year =21×10%=5%

A=P(1+100R)n

A=12000(1+1005)3

=12000(100105)3

=Rs.13891.50

Compound interest =A−P

=13891.50−12000

=Rs.1891.50