Question

Compute the compound interest on Rs 20,000 for 2 years at 20% per annum when compounded half yearly.

Answer 1

Here,
Principal (P) = Rs 20000
Rate (r) = 20% per annum = $\frac{20}{2}$% or 10% per half year
Time(n) = 2 years = 4 half years.
Since, A = P ${(1+\frac{r}{100})}^n$

$\therefore Amount=Rs20000\times {(1+\frac{10}{100})}^4=Rs20000\times {(1+\frac{1}{10})}^4=Rs20000\times {\left(\frac{11}{10}\right)}^4$

$=Rs20000\times \frac{11}{10}\times \frac{11}{10}\times \frac{11}{10}\times \frac{11}{10}=Rs2\times 11\times 11\times 11\times 11=Rs29282$

$\therefore C.I.=A-P$
$\therefore$ Compound Interest = Rs (29282 - 20000)
= Rs 9282