Question

A sum of Rs. 8000 was invested at a rate of 30% for a certain time compounded half yearly. The interest is 4167. Find the time (in years) it was invested for. 
1. 3
2. 1.5
3. 5
4. 2.5

Answer 1

Correct Answer - Option 2 : 1.5

Given:

Sum = Rs. 8000

Rate of interest = 30% compounded half yearly

Interest = Rs. 4167

Formula:

If the interest is compounded half yearly, the rate of interest will be halved and time will be doubled.

CI = P [1 + (R/100)]ⁿ – P

Calculation:

CI = P [1 + (R/100)]ⁿ - P

4167 = 8000 [1 + (15/100)]ⁿ - 8000

(1.15)ⁿ = 12167/8000

N = 3

Hence, time = 3/2 = 1.5 years

∴ The required time is 1.5 years