Question

Find the amount that David would receive if he invests Rs. 8192 for 18 months at 12% per annum, the interest being compounded half-yearly.

Answer 1

Given, 

Principal = Rs.8192 

Rate = 12% p.a =\(\frac{12}{2}\)= 6% half yearly

Time = 18 months \(=\frac{18}{12}\)\(={1}\frac{1}{2}\) years = 3 half years

Hence, 

Amount \(={P}[({1}+\frac{R}{100})^{time}]\)

\(={8192}[({1}+\frac{6}{100})^3]\)

\(={8192}\times(\frac{53}{50})^3\)

\(={8192}\times\frac{53}{50}\times\frac{53}{50}\times\frac{53}{50}\)= Rs.9826

So, 

David receives Rs.9826 after 18 months