Question

Please solve:

What sum will become Rs 9826 in 18 months at 2.5% per annum compounded half yearly?

Answer 1

Let the principal be Rs P

R = 2 ½ % = 5/2 % = 2.5 %

n = 18 months = 18/12 = 3/2 years

Amount = A = rs 9826

As the interest is compounded half yearly then
A = P ( 1 + r/2) ²ⁿ

9826 = P( 1 + 0.025/2) ^{2 x 3/2}
9826 = P(1 + 0.0125) ³

9826 = P (1.0125) ³
9826 = P x 1.03797
P = 9826/1.03797

P = Rs 9466.55