Compute the compound interest on Rs.1000 for 2years at 10% per annum when compounded half yearly.(write answer in the nearest integer).Answer Verified
Hint: According to given in the question we have to determine the compound interest on Rs.1000 for 2years at 10% per annum when compounded half yearly but first of all we have to understand about the compound interest which is explained below: Formula used: Now, to find the compound interest on the principal amount now we have to use the formula as given below: Complete step-by-step answer: Hence, with the help of formula (A) compound interest on Rs.1000 for 2years at 10% per annum when compounded half yearly is $ = 215.50Rs$ Note: Compound interest is the interest that is calculated on the initial principal amount, which also includes the accumulated interest from the previous period on the deposit or on loan amount. Solution Principal (P)= Rs 1000 Therefore, Principal (P) =Rs.1000 Amound after one half-year =Rs.1040 or, Principal for the second half-year =Rs.1040 Interest for the second half-year =1040×8×1100×2=Rs.4160100=Rs.41.60 Amount
after second
half-year or, Principal for the third half-year
=Rs.1081.60
∴ Compound interest for the third half-year Alternate way: Interest is compounded half yearly ∴ Interest @ half year =82=4% n = number of times interest added in 112 years =3 Amount (A) is given by A=P[1+r@ half year100]n =1000[1+4100]3 =1000×104100×104100×104100 =104×104×10410×100 =1124.864 Compound Interest = Amount − Principal =1124.864−1000=Rs.124.864 |