Question

Rs. $20,000$ is deposited at $6\%$ compound interest in a bank. If the interest is calculated semi-annually find the amount and compound interest for 1$\frac{1}{2}$ years.

Answer 1

We are given P = Rs. 20,000, R = 6% and n = 1$\frac{1}{2}$ years. Here the interest is to be calculated semi annually. Hence 2n = 3. We have the formula to calculate the amount semi annually. Using this formula, we can find the amount directly;
$A=P{(1+\frac{R}{2\times 100})}^{2n}=20000{(1+\frac{6}{2\times 100})}^3$
$=20000{(1+\frac{3}{100})}^3$
$=20,000(1.3{)}^3\approx 21,854.54$
Here $\approx$ denotes approximate value. Finally compound interest is given by
$C.I.=A-P=Rs.21,854.54-Rs.20,000=Rs.1,854.54\approx Rs.1,855$.