Question

How much would a sum of $16000$ amount to in $2$ years time at $10$% per annum compound interest, interest being payable half-yearly?

Answer 1

Given:-

Sum, $P=Rs.16000$

Rate of interest $=10\%$ per annum

Time $=2$ years

Since the interest is compounded annually.

Therefore,

$R=\frac{10}{2}=5\%$

$n=4$

Now, as we know that,

$A=P{(1+\frac{R}{100})}^n$

$\therefore A=16000{(1+\frac{5}{100})}^4$

$\Rightarrow A=16000\times {\left(\frac{21}{20}\right)}^4$

$\Rightarrow A=16000\times \frac{194481}{160000}=Rs.19448.1$