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The Simple Interest on an Amount for 2 Years at 8% is Rs 320. Calculate the Compound Interest on the Same Amount at the Same Rate for 1 Year If the Interest is Compounded Half-yearly. - Mathematics

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Question

The simple interest on an amount for 2 years at 8% is Rs 320. Calculate the compound interest on the same amount at the same rate for 1 year if the interest is compounded half-yearly.

Sum
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Solution

Here, P = ? ; t = 2 years ; r = 8 % p.a.

S.I. = Rs 320

P = Rs `("S.I." xx 100)/("r" xx "t")` 

P = Rs `(320 xx 100)/(8 xx 2)`

P = Rs 2,000 

Now, P =Rs 2,000 ; t = 1 year 

n = 2t = 2 × 1=2 

r = `1/2 xx 8 % = 4 %` Per conversion period.

`"A" = "P" (1 + "r"/100)^"n"`

A = Rs 2000 `(1 + 4/100)^2`

= Rs 2,000 x1.04 x 1.04 = Rs 2,163.20 

C.I. =A - P 

= Rs (2, 163.20 - 2,000) 

=Rs 163.20 

Hence, compound interest= Rs 163.20

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Chapter 1: Compound Interest - Exercise 1.5 [Page 15]

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Frank Mathematics - Part 2 [English] Class 10 ICSE
Chapter 1 Compound Interest
Exercise 1.5 | Q 5 | Page 15
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