Question

Compute the amount and the compound interest by using the formulae when : Principal = Rs 10000, Rate = 20% per annum compounded half-yearly, Time = 2 years.

Answer 1

Given, P = Rs 10000, rate = 20 % = 20/2 = 10% (quarterly), time = 2years = 2 × 2 = 4years

A = P (1 + R/100)n

= 10000 (1 + 10/100)4

= 10000 (110/100)4

= Rs 14641

Compound interest (CI) = A-P = Rs 14641 – 10000 = Rs 4641