The compound interest on Rs 8,000
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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