Question

In what time will ₹ 8000 earn ₹ 1261 as CI at 10% p.a., compounded half yearly?

Answer 1

Given, principal, P = ₹ 8000

Compound interest = ₹ 1261

Rate of interest, R = 10% p.a., annum compounded half-yearly

When interest is compounded half-yearly, we use the following formula, `A = P(1 + R/100)^(2T)`.

∴ `8000(1 + 10/200)^(2T) = 8000 + 1261`

⇒ `8000(1 + 1/20)^(2T) = 9261`

⇒ `(21/20)^(2T) = 9261/8000`

⇒ `(21/20)^(2T) = (21/20)^3`

⇒ `2T = 3`

⇒ `T = 3/2`

⇒ `T =  1.5`

Hence, the required time period is 1.5 years.