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Question

Rahim borrowed ₹10,24,000 from a bank for one year. If the bank charges interest of 5% per annum, compounded half-yearly, what amount will he have to pay after the given time period. Also, find the interest paid by him.
[3 marks]

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Solution

Borrowed amount by Rahim (P) = ₹10,24,000
Time period (T) = 1 yr
Interest rate (R) = 5 % per annum compounded half-hearly
Let amount = A
For compounded half- yearly, A = P(1+R200)2T=10,24,000(1+5200)2×1=10,24,000(1+5200)2
[ in half - yearly , R=R2 and T=2T]
=10,24,000×4140×4140=640×41×41=10,75,840
[2 marks]


Compound Interst,
CI = A - P = ₹10,75,840 - ₹10,24,000 = ₹51,840

[1 mark]

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