Question

A person deposited 20,000 rupees in a bank which gives 6% interest compounded half-yearly. How much would he get back after 2 years?

Answer 1

Amount deposited by the person, P = Rs.20000

Rate of interest, R = 6% compounded half-yearly

Time, T = 2 years

Simple interest is given by the formula

Interest for the first half of the first year = Rs

= Rs.600

Principal for the second half of the first year = Principal + Interest

= Rs.20000 + Rs.600

= Rs.20600

Interest for the second half of the first year = Rs

_{= Rs.618}

Principal for the first half of the second year = Rs.20600 + Rs.618

= Rs.21218

Interest for the first half of the second year = Rs

= Rs.636.54

Principal for the second half of the second year = Rs.21218 + Rs.636.54

= Rs.21854.54

Interest for the second half of the second year = Rs

_{= Rs.655.64}

∴Amount received by the person after two years = Rs.21854.54 + Rs.655.64

= Rs.22510.18