Question

What sum will become Rs 9826 in 18 months if the rate of interest is $2\frac{1}{2}$% per annum and the interest is compounded half-yearly?

• A. Rs. 9466.54
• B. Rs. 9646.54
• C. Rs. 9566.54
• D. Rs. 9456.54

Answer 1

The correct option is A Rs. 9466.54

r $=2\frac{1}{2}$ % $=\frac{5}{2}$ %

n $=18$ months $=\frac{3}{2}$ years

When the interest is compounded half
yearly,

$A=P{(1+\frac{r}{2\times 100})}^{n\times 2}$

$=>9826=P{(1+\frac{\frac{5}{2}}{2\times 100})}^{\frac{3}{2}\times 2}$
$=>9826=P(\frac{81}{80}{)}^3$
$=>P=Rs9466.54$