Question

Find the amount which Ram will get on ₹4,096, if he gave it for 18 months at $12\frac{1}{2}$% per annum, interest being compounded half yearly.

Answer 1

Given,
Principal (P) = ₹4,096
Rate (R) $=12\frac{1}{2}$% per annum $=\frac{25}{2}$% per annum $=\frac{25}{4}$% per annum
Number of years (n) = 18 months
There will be three half years in 18 months.
Amount (A) $=P{(1+\frac{R}{100})}^n$
$=[4,096{(1+\frac{25}{4\times 100})}^3]$
$=[4,096{(1+\frac{1}{16})}^3]$
$=[4,096{\left(\frac{17}{16}\right)}^3]$
$=₹4,913$
$\therefore$ The required amount is ₹4,913.