Question

For Rs 8,000 at 10% p.a, what would be the compound interest (compounded half-yearly) after 1.5 years?
1. Rs 1261
2. Rs 1208
3. Rs 1312
4. Rs 1205

Answer 1

Correct Answer - Option 1 : Rs 1261

Given:

Principle = P = Rs.8000

Time = 1.5 years (compounded half-yearly)

Rate = 10%

Formula Used:

Amount = P × (1 + R/100)^T

C.I = Amount - Principle

Calculation:

We know that when it is compounded half-yearly,

Then rate becomes half and time become double.

R = 5% and T = 3 years

Amount = P × (1 + R/100)T = 8000 × (1 + 5/100)3 = \(8000 × {21 \ \over 20} × {21 \ \over 20} × {21 \ \over 20}\) = 9261

So, C.I = Amount - Principle = 9261 - 8000 = 1261

∴ The compound interest is Rs.1261.