Question
A sum of money amounts to Rs. 2040 at 18% per annum simple
interest after 2 years. If the same sum is invested at the same rate of interest, but compounded half-yearly, what will be its value after 1 year?Solution
Amount = SI + P
=> 2040 = (P * 18 * 2)/100 + P
=> 2040 = 34P/25
=> P = 2040 * 25/34
=> P = Rs. 1500
When amount is calculated on the same sum of money for 1 year at the same rate of interest compounded annually and the interest is calculated half yearly.
So, Amount = 1500 * (1 + 9/100)2 = Rs. 1782.15
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