Question

Roma borrowed Rs. 64000 from a bank for $1\frac{1}{2}$ years at the rate of $10\%$ per annum. Compute the total compound interest payable by Roma after $1\frac{1}{2}$ years, if the interest is compounded half-yearly.

Answer 1

Principal (sum borrowed) (P) = Rs. 64000
Rate (R) $=10\%$ p.a or $5\%$ half-yearly
Period (T) $=1\frac{1}{2}$ years or 3 half-years
Interest for the first half year $=\frac{PRT}{100}$
$=Rs.\frac{64000\times 5\times 1}{100}=Rs.3200$
Amount after first half-year
=Rs. 64000 + Rs. 3200 = Rs. 67200
Or principal for the second half-year
= Rs. 67200
Interest for the second half-year
$=Rs.\frac{67200\times 5\times 1}{100}=Rs.3528$
$\therefore$ Total compound interest for 3 half-years
or $1\frac{1}{2}$ years = Rs. 3200 + Rs. 3360 + Rs. 3528
= Rs. 10088