Question

Calculate the amount and compound interest on Rs. $62,500$ for $1\frac{1}{2}$ years at 8% per annum compounded half yearly.

• A. Amount =Rs. 70304, compound interest=Rs. 7804
• B. Amount =Rs. 70304, compound interest=Rs. 7404
• C. Amount =Rs. 70204, compound interest=Rs. 7804
• D. Amount =Rs. 70442, compound interest=Rs. 7804

Answer 1

Answer: (A)

Amount =Rs. 70304, compound interest=Rs. 7804

Here, Principal =Rs. 62,500
Rate =8% per annum =4% half year
Time =$1\frac{1}{2}$ years =3 half years
$Amount=P(1+\frac{R}{100}{)}^T$
$\therefore Amount=Rs.[62500\times {(1+\frac{4}{100})}^3]$
$Amount=(62500\times \frac{104}{100}\times \frac{104}{100}\times \frac{104}{100})=Rs.70304$
$\therefore$ Compound interest =Rs.(70304-62500)=Rs.7804