Question

What amount has to be repaid on a loan of Rs.16000 for 1.5 years at 10% per annum compounded half yearly?

• A. Rs.18850
• B. Rs.15822
• C. Rs.15552
• D. Rs.18522

Answer 1

The correct option is D

Rs.18522

Rate of interest = half of 10% = 5% half yearly
Total amount, A $=P{(1+\frac{R}{100})}^n$, Where P is the initial amount and R is the interest rate
n = Number of intervals, here it is 3 because it it compounded half yearly
$9n=\frac{1.5}{0.5}=3$ Amount to be paid after $1\frac{1}{2}$ years $=16000{(1+\frac{5}{100})}^3=16000\times (1.05{)}^3$
=Rs. 18522