Question

What will be the compound interest on $Rs5000$ if it is compounded half-yearly for $1$ year $6$ months at $8\%$ per annum?

Answer 1

Given Principal amount, $P=Rs.5,000$

Time, $t=1$ year $6$ months,
So $t=3$ as compound interest compounded half yearly.

$r=8\%$ per annum

Thus, $C.I=P(1+\frac{r}{100}{)}^t-P$

$=P\left(\right(1+\frac{r}{100}{)}^t-1)$

$=5000\left(\right(1+\frac{8}{100}{)}^3-1)$
$=5000\left[\right(1.08{)}^3-1]$
$=5000(1.2597-1)$

$=5000\left(0.2597\right)$

$=Rs.1298.5$