Question

Find the amount and the compound interest on Rs. 6000 for 1 year at 10% per annum compounded halfyearly.

Answer 1

Present value = Rs.6000 

Interest rate = 10 % per annum 

Time = 1 years 

∵ Interest is compounded half-yearly. 

∴ Amount (A) = P [1 + (R/2)/100]²ⁿ [Where, P = Present value 

R = Annual interest rate 

n = Time in years] 

∴ A = 6000 [1 + (10/2)/100]² 

⇒ A = 6000 [1 + 5/100]² 

⇒ A = 6000 [1 + 1/20]² 

⇒ A = 6000 [21/20]² 

⇒ A = 6000 × 21/20 × 21/20 

⇒ A = 300 × 21 × 21/20 

⇒ A = 15 × 21 × 21 

⇒ A = 6615 

∴ Amount = Rs.6615 

∴ Compound interest = Rs.(6615 – 6000) 

= Rs.615