Divakaran deposited a sum of Rs 6250 in the Allahabad Bank for 1 year,
Question:

Divakaran deposited a sum of Rs 6250 in the Allahabad Bank for 1 year, compounded half-yearly at 8% per annum. Find the compound interest he gets.

Solution:

Principal amount $=$ Rs. 6250

Rate of interest $=8 \%$ per annum $=4 \%$ for half year

Time $=1$ year $=2$ half years

Principal for the first half year $=$ Rs. 6250

Interest for the first half year $=$ Rs. $\left(\frac{6250 \times 4 \times 1}{100}\right)=$ Rs. 250

Now, amount at the end of the first half year $=$ Rs. $(6250+250)=$ Rs. 6500

Principal for the second half year $=$ Rs. 6500

Interest for the second half year $=$ Rs. $\left(\frac{6500 \times 4 \times 1}{100}\right)=$ Rs. 260

Now, amount at the end of the second half year $=$ Rs $(6500+260)=$ Rs. 6760

$\therefore$ Compound interest $=$ Rs $(6760-6250)=$ Rs 510

Hence, Divakaran gets a compound interest of Rs 510 .

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