Question

Compute the compound interest on Rs.1000 for 2 years at 10% per annum when compounded half yearly. (write answer in the nearest integer).

Answer 1

Here, Principal P = Rs. 1000

R $=10\%$ per annum and $n=2$ years
$\therefore$ Amount after 2 years = P ${(1+\frac{R}{200})}^{2n}$
= Rs. $1000\times {(1+\frac{10}{200})}^{2\times 2}=Rs.1000\times {(1+\frac{1}{20})}^4=Rs.1000\times$${\left(\frac{21}{20}\right)}^4$
= $Rs.1000\times \frac{21}{20}\times \frac{21}{20}\times \frac{21}{20}\times \frac{21}{20}=Rs.1215.50$

Hence, compound interest = Amount - Principal
$=Rs.1215.50-Rs.1000=Rs.215.50$