Question

Divakaran deposited a sum of $Rs.6250$ in the Allahabad bank for $1$ year at compound interest, if the rate is compounded half-yearly at $8\%$ per annum . Find the compound interest.

Answer 1

$P=Rs.6250,R=8$%, $T=1$ year

$A=P{(1+\frac{r}{100})}^m$, where $m$ is time

when it is compounded half yearly

$r\Rightarrow \frac{r}{2}$

So, $r=\frac{8}{2}\%=4\%$

$m=2\times Numberofyears=2$

$A=Rs.6250{(1+\frac{4}{100})}^2$

$=Rs.6760$

$CI=A-P$

$=Rs.(6760-6250)$

$=Rs.510$