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Question

Find the amount and the compound interest on \({R}{s}{10},{000}\) for \({\left({1}\right)}\frac{{1}}{{2}}\) years at \({10}\%\) per annum, compounded half yearly. Would this interest be more than the interest he would get if it was compounded annually?

Answer

Principle amount=10,000

Time=1.5 years= 3 half years

Interest rate=10% per year=5% per half year

\({A}={P}{\left({1}+\frac{{R}}{{100}}\right)}^{{n}}\)

\({A}={10},{000}{\left({1}+{0.05}\right)}^{{3}}\)
\({A}={10},{000}{\left({1.157}\right)}\)
A=11576 Rs
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