Sheela deposited Rs 20000 in a bank, where the interest is credited half-yearly. If the rate of interest paid by the bank is 6% per annum, what amount will she get after 1 year?
Let the principal amount be $P=$ Rs. 20000 .
Annual rate of interest, $R=6 \%$
Rate of interest for half year $=3 \%$
Time, $n=1$ year $=2$ half years
Then the amount with the compound interest is given by
$A=\mathrm{P} \times\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$=$ Rs. $20000 \times\left(1+\frac{3}{100}\right)^{2}$
$=$ Rs. $20000 \times\left(\frac{100+3}{100}\right)^{2}$
$=$ Rs. $20000 \times\left(\frac{103}{100}\right)^{2}$
$=$ Rs. $20000 \times\left(\frac{103}{100}\right) \times\left(\frac{103}{100}\right)$
$=$ Rs. $(2 \times 103 \times 103)$
$=$ Rs. 21218
Therefore, Sheela gets Rs. 21218 after 1 year.