Question

Kamal borrowed Rs. 57600 from LIC against her policy at 12 ½ % per annum to build a house. Find the amount that she pays to the LIC after 1 ½ years if the interest is calculated half-yearly.

Answer 1

Given details are,

Principal (p) = Rs 57600

Rate (r) = 12 ½ % per annum = 25/2×2% = 25/4% = 12.5/2% (half yearly)

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

By using the formula,

A = P (1 + R/100) ⁿ

= 57600 (1 + 12.5/2×100)³

= 57600 (212.5/200)³

= Rs 69089.06

∴ Amount is Rs 69089.06