Question

What sum is invested for $1\frac{1}{2}$ years at the rate of $4$% p.a. compounded half-yearly which amounts to Rs. $1,32,651$?

Answer 1

Compounded half yearly $⟹r=\left(1/2\right)\times 4\%=2\%$ per interst period.

and $n=2\times \left(3/2\right)=3$

$A=P(1+\frac{r}{100}{)}^n$

$⟹132651=P(1+\frac{2}{100}{)}^3$

$⟹132651=P\left(1.061208\right)⟹P=Rs.125000$