Find the amount and the compound interest on Rs 10,000 for years at 10% per annum, compounded half yearly. Would this interest be more than the interest he would get if it was compounded annually?
Here, Principal (P) = Rs. 10000, Rate of Interest (R) = 10% = 5% (compounded half yearly)
Time, n = years = 3 years (compounded half yearly)
= Rs. 11,576.25
Compound Interest (C.I.) = A – P
= Rs. 11,576.25 – Rs. 10,000 = Rs. 1,576.25
If it is compounded annually, then
Here, Principal (P) = Rs. 10000, Rate of Interest (R) = 10%, Time = years
Amount (A) for 1 year =
= Rs. 11,000
Interest for 1/2 year = = Rs. 550
∴ Total amount = Rs. 11,000 + Rs. 550
= Rs. 11,550
Now, C.I. = A – P = Rs. 11,550 – Rs. 10,000
= Rs. 1,550
Yes, interest Rs. 1,576.25 is more than Rs. 1,550.
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.