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Question

Nagma invested Rs.6000 in a company at compound interest which is compounded semi-annually. She receives Rs.7986 after 18 month from the company, then the rate of interest per annum is:

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Solution

Given: Principle amount P=Rs.6000 and Amount A=Rs.7986
Let say the rate of interest =r%
time t=18months
Since 1 month =112 year
So, 18 months =1812 year
Thus, time t=32 year
Interest is compounded semi-annually.
n=2×t
n=2×(32)
n=3

Since, we have A=P(1+r100)n
By substituting given values, we get
7986=6000(1+r100)3
(1+r100)3=79866000
(1+r100)=(1331)13
(1+r100)=11
r100=111
r100=10
It gives r%=10%
Hence, the rate of interest =10% per annum.

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