Question

Find the compound interest for Rs. $7000$ for a period $3$ years, compounded semi-annually at the rate of $4\%$ per six months.

• A. $1857.23$ Rs.
• B. $2857.23$ Rs.
• C. $3857.23$ Rs.
• D. $14457.23$ Rs.

Answer 1

Answer: (A)

$1857.23$ Rs.

Principal $=7000$, $R$ $=4\%$, $n$ $=2$ ($\because$ semiannually compounded),
$t$ $=3$ years
Using the formula, we have
$A=P{(1+\frac{R}{100})}^{n.t}$
$\Rightarrow A=7000{(1+\frac{4}{100})}^{2\times 3}$
$\Rightarrow A$ $=7000\times (1.04{)}^6$
$\Rightarrow A$ $=7000\times 1.26531902$
Amount $=8857.23$
Compound interest $=$ Amount $-$ Principal
$=8857.23-7000$
Compound interest $=1857.23$ Rs.