Question

Find the amount of Rs. 4096 for 18 months at $12\frac{1}{2}\%$ per annum, interest being compounded semi-annually?

Answer 1

Principal (P) = Rs. 4096
Rate (R) $=12\frac{1}{2}\%=\frac{25}{2}\%$ p.a or $\frac{25}{4}\%$ semi annually.
Period (n) = 18 months for semi annually or 36 months =3 half years.
$\therefore$ Amount (A) = $P{(1+\frac{R}{100})}^n$
$=Rs.4096\times {(1+\frac{25}{4\times 100})}^3=Rs.4096{\left(\frac{17}{16}\right)}^3$
$=Rs.4096\times \frac{17}{16}\times \frac{17}{16}\times \frac{17}{16}=Rs.4913$