Question
In 2016, the interest was semi-annually, the interest
would have been Rs 1030.402 for given time. Find the interest when compounded annually.Solution
Rate of interest = 4/2 = 2% (semi annually) Interest = Rs 1030.402 for given time, not for 1 year, but the whole time. Now, C.I = 12500 + 1030. 402 = 13530.402 Then, 12500 [1 + 2/100] n = 13530.402 [51/50]n = 6765201/6250000 So, n = 4 [semi-annually] which means actual time = 4/2 = 2yearsthen, Amount compounded annually = 12500 [1 + 4/100]2 = Rs 13520 Now, C.I = 13520 - 12500 = Rs 1020
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