Correct Answer - Option 3 : ₹ 1261
Given:
Principal = ₹ 8000
Rate = 10%
Time = 3/2 years
Interest is compounded semi-annually
Concept Used:
If interest is compounded semi-annually means interest is calculated in every six month that is 2 times in a year or we can simply convert this problem in normal compound interest problem by multiplying the time by 2 and dividing the rate by 2
Formula Used:
Amount = Principal[1 + (Rate/100)]Time
Amount = Principal + Interest
Calculation:
New rate = 10%/2 = 5%
New time = 3/2 × 2 = 3 years
Amount = ₹ 8000[1 + 5/100]3
⇒ Amount = ₹ 8000[1 + 1/20]3
⇒ Amount = ₹ 8000[21/20]3
⇒ Amount = ₹ 8000[9261/8000]
⇒ Principal + Interest = ₹ 9261
⇒ Interest = ₹ 9261 – ₹ 8000
⇒ Interest = ₹ 1261
∴ The compound interest on ₹ 8000 at the rate of 10% per annum for 3/2 years if the interest is compounded semi-annually is ₹ 1261
