Question

Mukesh borrowed $Rs.75000$ from a bank. If the rate of interest is $12\%$ per annum, find the amount he would be paying after $1\frac{1}{2}$ years if the interest is compounded half-yearly.

Answer 1

Given,

Principal $\left(P\right)=Rs.75000$

Rate $\left(R\right)=12\%$ yearly i.e. $6\%$ half- yearly

Time $\left(T\right)=$ $1\frac{1}{2}$years$=3$ half-years

Number of periods $\left(n\right)=3$

When the interest compounded half-yearly

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

$=Rs.75000{(1+\frac{6}{100})}^3$

$=Rs.75000{(1+\frac{3}{50})}^3$

$=Rs.75000{\left(\frac{53}{50}\right)}^3$

$=Rs.75000\left(\frac{53}{50}\right)\left(\frac{53}{50}\right)\left(\frac{53}{50}\right)$

$=Rs.89326.20$

Hence, he has to pay $Rs.89326.20$ at the end of $1\frac{1}{2}$ years.