Question

If the interest is compounded half yearly, calculate the amount if the principle is $Rs.7,400$, the rate of interest is $5\%$ per annum & the duration is one year

• A. Rs.7775.92
• B. Rs.7772.46
• C. Rs.7774.63
• D. Rs.7770.44
• E. Rs.7777

Answer 1

The correct option is D ($Rs.7774.63$)

Given principle amount $P=Rs.7,400$
Rate of interest $=5$% , compounded half yearly $n=2$
Time $t=1$ year.
Thus, amount after $1$ year is
$A=P(1+\frac{r}{n}{)}^{\left(nt\right)}$
$=7400(1+\frac{5}{2\times 100}{)}^{2\times 1}$
$=7400(1+\frac{1}{40}{)}^2$
$=7400(\frac{41}{40}{)}^2$
$=7400\left(1.050625\right)$
$\therefore A=7774.63Rs.$
Hence, amount after $1$ year is $Rs.7774.63$