Question

Find the compound interest on Rs.1000 at the rate of 20% per annum for 18 months when interest compounded half-yearly.

• A. Rs.331
• B. Rs. 1331
• C. Rs. 320
• D. None of these

Answer 1

The correct option is A Rs.331

Here P = Rs. 1000, R = 20%

$T=18monthsor1\frac{1}{2}years.$

Compound interest when interest in compounded annually

$CI=1000{[1+\frac{R/2}{100}]}^{2T}-P$

$=1000{[1+\frac{10}{100}]}^3-1000=Rs.331$