Question

Find the amount and compound interest on Rs.7500 for 1`(1)/(2)` years at 8%, payable semi-annually.

Answer 1

Here P₁ =  Rs.7500 and rate of interest for half year (r) = 4%
So, Amount after `(1)/(2)` year 
= `"P"(1 + "r"/100)`

= `7500(1 + 4/100)`

= `7500 xx (104)/(100)` = 7800
Thus, P₂ = Rs.7800 and r = 4%
Amount after 1 year
= `"P"(1 + "r"/100)`

= `7800(1 + 4/100)`

= `7800 xx (104)/(100)` = 8112
Thus, P₃ = Rs.8112 and r = 4%
Amount after 1`(1)/(2)` year
= `"P"(1 + "r"/100)`

= `8112(1 + 4/100)`

= `8112 xx (104)/(100)` = 8436.48
Hence, Amount = Rs.8436.48
Also, C.I.
= A - P
= Rs.8436.48 - Rs.7500
= Rs.936.48.