Question
Calculate the amount of interest earned on an investment
of Rs. 62,500 at an annual compound interest rate of 32%, compounded half-yearly, for a period of 12 months.Solution
Effective time = (12/6) = 2 terms Effective rate = (32/2) = 16% CI = P X (1 + R/100)t - P Or, compound interest = 62,500 X (1.16)2 - 62,500 Or, compound interest = 84100 - 62,500 = Rs. 21600
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