Question

What is compound interest for 1 year on a sum of rs 20,000/- at the rate of 40% per annum compounding half yearly?

Answer 1

Given Principal Amount = P= 20000

Rate of Interest Per annum = i= 40%... Compounded half yearly so 40%/2

Time = 1 year

Then n = number of Periods= 1×2 = 2(Because Compounded half yearly)

We know that Compound Interest
= P{(1+i)^n-1}

Subsitute the above information

= 20000{ (1 + 40%/2)^2 - 1}

=20000 { ( 1 + 20%) ^2 -1)

=20000 { (1+ 0.2)^2 -1}

=20000{ (1.02)^2 - 1}

=20000{ 1.0404 - 1}

=20000{0.0404}

= 808....is the compound Interest amount.

Answer 2

Hay dear friend

according to the question we know that

Principal (p) = 20000

and interest (I) = 40/2%

Time = 1year and n = 2

according to the question we know that formula =>

$p(1 + i) {}^{n} - 1)$

$20000( 1 + \frac{40\%}{2} ) {}^{2} - 1$

$20000(1 + 20\%) {}^{2} - 1$

=> [(1+0.2)²-1]

=> 0.0404

so, Interest be 20000×0.0404

=> 808

I hope it's help you