Question

Ashima took a loan of Rs 1,00,000 at 12% p.a. compounded half-yearly. She paid Rs.1,12,360. If (1.06)² is equal to 1.1236, then the period for which she took the loan is:

(a) 2 years (b) 1 year (c) 6 months (d) 1(1/2) years

Answer 1

(b) 1 year

Explanation: 

P = Rs.100000, R = 12% per annum compounded half-yearly.

Amount = Rs.112360

Since we know,

A = P (1+R/100)^T

112360 = 100000(1+12/100)^T

112360/100000 = (1+12/100)^T

(1.1236)¹ = (1.12) ^T

If we compare the base terms, 1.1236 is approximately equal to 1.12

Hence, T = 1 year.