Question

John deposited Rs 2500 on 1^st January in a co-operative bank. Bank computes compound interest half yearly. Annual interest rate is 6%. Again he deposited Rs 2500 on 1^st July? How much amount he will have in his account at the end of the year?

Answer 1

Amount John deposits on 1^st January = Rs. 2500

Principal after the half year up to July 1^st = 2500 (1 + \(\frac{3}{100}\))

= 2500 × \(\frac{103}{100}\)

= Rs. 2575

Amount deposited in July 1^st

= Rs 2500

Principal after July 1^st = 2575 + 2500 = 5075

Amount he gets at the end of the year 3

= 5075 × (1 + \(\frac{3}{100}\))

= 5075 × \(\frac{103}{100}\)

= Rs 5227.25