Question

Calculate the amount and compound interest for $Rs.10,000$ for 1$\frac{1}{2}$ years at $5$% compounded half-yearly.

Answer 1

Here $P=10,000$ Rs.,

$n=2\left(1\frac{1}{2}\right)=3$ years(Compounded semi-annually) and $R=\frac{5}{2}$(Compounded semi-annually)

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

$=5000{(1+\frac{5}{2\times 100})}^3$

$=5000{\left(\frac{41}{40}\right)}^3$

$=\frac{5000\times (41{)}^3}{40\times 40\times 40}$

$=10,768.90$ Rs.

Compound interest$(C.I)=A-P=10,768.90-10,000=768.90$

Hence, the compound interest is Rs. $769$.