Question

Compute C.I. on Rs.390625 for a year at 8% per annum when the interest is compounded sern annually.

Answer 1

$P=$Rs. $390625$, $R=8\%$

$A=P{(1+\frac{r}{n})}^{nt}$

$n=$no. of compounding a year

$t=$ total no. of years.

$A=390625{[1+\frac{8}{2}]}^{2\times 1}$

$n=2$(semi-annually)

$=390625[1+4{]}^2$

$=390625\left(25\right)$

$A=$Rs. $9765625$

$\therefore A=CI+P$

$\therefore CI=A-P$

$=9765625-390625$

$CI=$Rs. $9375000$.