Question

Abha purchased a house from Avas Parishad on credit. If the cost of the house is Rs. 64000 and the rate of interest is $5\%$ per annum compounded half-yearly, find the interest paid by Abha after one year and a half.

Answer 1

Price of house (P) = Rs. 64000
Rate of interest (R) $=5\%$ p.a or $\frac{5}{2}\%$ half yearly
Period (n) $=1\frac{1}{2}$ years or 3 half years.
$\therefore$ Amount (A) $=P{(1+\frac{R}{100})}^n$
$=Rs.64000{(1+\frac{5}{2\times 100})}^3$
$=Rs.64000{\left(\frac{41}{40}\right)}^3$
$=Rs.64000\times \frac{41}{40}\times \frac{41}{40}\times \frac{41}{40}$
= Rs. 68921
$\therefore$ Compound interest (C.I) = A- P
= Rs. 68921 - Rs. 64000 = Rs.4921