Question

Roma borrowed Rs. 64000 from a bank for 1 1/2 years at the rate of 10% per annum. Compare the total compound interest payable by Roma after 1 1/2 years, if the interest is compounded half-yearly.

Answer 1

Given details are,

Principal (p) = Rs 64000

Rate (r) = 10 % = 10/2 % (for half a year)

Time = 1 ½ years = 3/2 × 2 = 3 (half year)

By using the formula,

A = P (1 + R/100) ⁿ

= 64000 (1 + 10/2×100)³

= 64000 (210/200)³

= Rs 74088

∴ Compound Interest = A – P = Rs 74088 – Rs 64000 = Rs 10088