Question:
The compound interest on Rs 8,000 for one year at 16% p.a. compounded half yearly is ______, given that (1.08)2 = 1.1664.
Solution:
Rs. 9331.2
Explanation: Principal = Rs.8000
Time period = 1 year
Rate = 16% = 16/100 = 0.16
Amount = P ( 1+r/n)nt
n = 2 (compounded half yearly in a year)
A = 8000(1+0.16/2)2×1 = 8000 (1+0.08)2 = 8000 (1.08)2
A = 8000 × 1.1664
A = 9331.2
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