Question

Swati borrowed $Rs.40960$ from a bank to buy a piece of land. If the bank charges $12\frac{1}{2}\%$ per annum, compounded half-yearly, what amount will she have to pay after $1\frac{1}{2}$ years? Also, find the interest paid by her.

Answer 1

Given: Principal $\left(P\right)=Rs.40960$

Rate $\left(R\right)=12\frac{1}{2}=\frac{25}{2}\%$ per annum or $\frac{25}{4}\%$ half yearly

Period $\left(n\right)=1\frac{1}{2}$ years or $3$ half years

$\therefore \text{Amount (A) = P}{(1+\frac{R}{100})}^n$

$=Rs.40960{(1+\frac{25}{4\times 100})}^3$

$=Rs.40960\times {\left(\frac{17}{16}\right)}^3$

$=Rs.40960\times \frac{17}{16}\times \frac{17}{16}\times \frac{17}{16}$

$=Rs.49130$

$\therefore$ $C.I.=A-P$

$=Rs.49130-Rs.40960=Rs.8170$