Question

Question 1 (c)
Calculate the amount and compound interest on:
c) Rs 62,500 for $1\frac{1}{2}\%$ years at 8% per annum compounded annually.

Answer 1

(c) Here, principal (P)=Rs 62500, Time (n) = $1\frac{1}{2}=\frac{3}{2}$ Years = 3 years ( Compounded half yearly)
Rate of interest (R) = 8% = 4% ( Compound half yearly)
$Amount\left(A\right)=P{(1+\frac{R}{100})}^n=62500{(1+\frac{4}{100})}^3=62500{(1+\frac{1}{25})}^3$
$=62500{\left(\frac{26}{25}\right)}^3=62500\times \frac{26}{25}\times \frac{26}{25}\times \frac{26}{25}$
= Rs 70,304
Compound Interest (C.I) = A - P = Rs 70304 - Rs 62500 = Rs 7,804