Question

Abha purchased a house from Avas Parishad on credit. If the cost of the house is Rs. 64000 and the rate of interest is 5% per annum compounded half-yearly, find the interest paid by Abha after one year and a half.

Answer 1

Given details are,

Principal (p) = Rs 64000

Rate (r) = 5 % per annum = 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

= 64000 (1 + 5/2×100)³

= 64000 (205/200)³

= Rs 68921

∴ CI = Rs 68921 – 64000 = Rs 4921