Question

A sum of $10,000$ is invested at the rate of $8\%$ per year for $12$ months. What is Compound interest if interest is compounded half-yearly?

Answer 1

principal amount given is Rs. 10, 000

Interest rate is 8% per year for 12 months.

It is compounded half yearly.

So,After 6 months, interest added =$\frac{8}{100}\times 10,000$

$=Rs.800.$

Sum = 10000+800

=Rs. 10,800.

After 12 months, It is compounded with interest

$=10,800\times \frac{8}{100}$

$=Rs.8.64$

$\therefore$ Compound interest $=800+864$

$=Rs.1664$