Question
Find the compound interest on Rs 10,000 at 8% per annum,
compounded half-yearly, for 1.5 years.Solution
Rate per half-year = 8%/2 = 4% Number of half-years in 1.5 years = 3 Amount A = P(1 + r/100)^n = 10000 × (1.04)^3 Compute (1.04)^2 = 1.0816 Then (1.04)^3 = 1.0816 × 1.04 = 1.124864 So A ≈ 10000 × 1.124864 = Rs 11,248.64 Compound Interest = A − P = 11,248.64 − 10,000 = Rs 1,248.64.
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