Question

If a sum of ₹ 100 is invested at 20% per annum compounded half-yearly, then find the amount after 1 year 6 months.

• A. 133.1

Answer 1

The correct option is A 133.1
$\text{Given: Principal =}₹100\text{Interest rate per annum =}20\%p.a\text{Interest rate half yearly}=\frac{20\%}{2}=10\%$

Since the interest is compounded half yearly, there will be three conversion periods in one year and six months.
$\Rightarrow n=1.5\times 2=3.$

By using formula for compound interest, we get,

$\text{Amount}=\text{P}\left[{(1+\frac{r}{100})}^n\right]$

$\text{Amount}=100\left[{(1+\frac{10}{100})}^3\right]$

$\text{Amount}=₹133.1$