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
Calculate the amount and compound interest on
(a) Rs 10,800 for 3 years at per annum compounded annually.
(b) Rs 18,000 for years at 10% per annum compounded annually.
(c) Rs 62,500 for years at 8% per annum compounded half yearly.
(d) Rs 8,000 for 1 year at 9% per annum compounded half yearly.
(You could use the year by year calculation using SI formula to verify).
(e) Rs 10,000 for 1 year at 8% per annum compounded half yearly.