Question

What amount is to be repaid on a loan of $Rs.12,000$ for $1$ and half years at $10\%$ per annum compounded half-yearly?

Answer 1

Given: Principal, $P=Rs.12,000$

There are $1$ and half years. So, compounding will be done $3$ times.

$n=$ number of times interest is added $=3$

Rate of interest

$=$ Half of $10\%=5\%$ half-yearly

For Compounded half-yearly, Amount will be given by

Amount, $A=P\times {[1+\frac{R}{100}]}^n$

$A=Rs.12000\times {[1+\frac{5}{100}]}^3$

$A=Rs.12000\times \frac{21}{20}\times \frac{21}{20}\times \frac{21}{20}$

$A=Rs.13,891.50$

Hence, Amount to be repaid is $Rs.13,891.50$