Question

Calculate the C.I. on Rs. 3,500 at 6% per annum for 3 years, the interest being compounded half-yearly.

Do not use mathematical tables. Use the necessary information from the following:

(1.06)³ = 1.191016; (1.03)³ = 1.092727
(1.06)⁶ =1.418519; (1.03)⁶ = 1.194052

Answer 1

Given: P = Rs. 3,500; r = 6% and n = 3 years

Since interest is being compounded half-yearly

Then, `"C.I." = "P"[( 1 + r/[ 2 xx 100 ])^(n xx 2)]`

= 3,500`[( 1 + 6/[ 2 xx 100 ])^(3 xx 2)]`

= 3,500`[(206/200)^6]`

= 3,500 × [(1.03)⁶]

= 3,500 × 1.194052

= ₹ 4179.18

C.I. = A - P 

= ₹ 4179.18 – ₹ 3500

= ₹ 679.18