Question

Calculate the compound interest on a sum of ₹ 5000 in 1.5 years when interest is compounded half-yearly at the rate $20\%$ of per annum.

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Answer 1

Given:

P = ₹ 5000

R = $20\%$ per annum, so will be $10\%$ if compounded half-yearly

n = 3 (As 1.5 years has 3 half year in it)

Compound interest will be calculated by C.I = [$P\times (1+\frac{R}{100}{)}^n$] - P

Substituting the value we get

C.I = [$5000\times (1+\frac{10}{100}{)}^3$] - 5000

C.I = [5000$\times$$\frac{11}{10}\times$$\frac{11}{10}\times \frac{11}{10}$] - 5000

C.I = ₹ 6655 - ₹ 5000

C.I = ₹ 1655