Question
If interest be compounded half-yearly, then find the
compound interest on ₹8,000 at the rate of 20% per annum for 1 year.Solution
Here, the interest is compounded half yearly, R = 20/2 = 10%, n = 2 ⇒ 8000[(1 + 10/100)2 - 1] ⇒ 8000[(11/10)2 - 1] ⇒ 8000[(121 - 100)/100] ⇒ 8000 × 21/100 ⇒ 1680 rupees ∴ The required interest is 1680 rupees.
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