Question

Michael borrowed $Rs.16000$ from a finance company at $10\%$ per annum. compounded half-yearly. What amount of money will discharge his debt after $1\frac{1}{2}$years?

Answer 1

$\text{Principal (p) = Rs. = 16000}\text{Rate (r) =}10\%p.a.or5\%\text{half yearly}\text{Period (t)}=1\frac{1}{2}\text{year or 3 half years.}\text{Interest for the first year}=\frac{PRT}{100}=Rs.\frac{16000\times 5\times 1}{100}=Rs.800\text{Amount at the end of first half year = Rs. 16000 + Rs. 800 = Rs 16800}\text{Principal for the second half year = Rs 16800}\text{Interest for the second half year}=\frac{16800\times 5\times 1}{100}=Rs.840\text{Amount at the end of second half year =Rs. 16800 + Rs. 840 = Rs. 17640}\text{Interest for the third half year}=Rs.\frac{17640\times 5\times 1}{100}=Rs.882\therefore \text{Amount at the end of 3rd half year = Rs. 17640 + 882 = Rs. 18522 Ans.}$