Question
What is the total amount received from an investment of
Rs. 8,000 for a period of 18 months, if the compound interest is calculated at 18% per annum and compounded semi-annually (once every 9 months)?Solution
Number of times the interest is compounded = 18 ÷ 9 = 2
Rate of interest = 18 X (9/12) = 13.5%
So, total amount received = 8000 X {1 + (13.5/100)} 2
= 8000 X 1.135 2 = Rs. 10305.8
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