Arif took a loan of Rs 80,000 from a bank. If the rate of interest is 10% per annum, find the difference in amounts he would be paying after years if the interest is

(i) compounded annually.


(ii) compounded half yearly.

(i) Here, Principal (P) = Rs. 80,000, Time, n = 1 1/2 years, Rate of interest (R) = 10%


Amount for 1 year (A) =



= Rs. 88,000


Interest for 1/2 year =


= Rs. 4,400


Total amount = Rs. 88,000 + Rs. 4,400 = Rs. 92,400


(ii) Here, Principal (P) = Rs.80,000,


Time, n = year = 3year (compounded half yearly)


Rate of interest (R) = 10% = 5% (compounded half yearly)




= Rs. 92,610


Difference in amounts


= Rs. 92,610 – Rs. 92,400 = Rs. 210


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