Question
An investment of Rs. 9,600 at an annual interest rate of
'R' percent for three years yields a simple interest of Rs. 5,760. Calculate the compound interest accrued on a separate investment of Rs. 5,000 for one year at the same interest rate, with the interest being compounded semi-annually.Solution
Simple interest = Principal X (rate/100) X time 5,760 = 9,600 X (R/100) X 3 'R' = (5,760/288) = 20 Effective rate of interest = (20/2) = 10% Effective time = 2 X 1 = 2 terms So, CI = 5000 x (1 + 10/100)2 - 5000 So, CI = 5000 x (121/100)Â - 5000 So, CI = 6050 - 5000 So, CI = Rs 1050
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