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8. Find the amount and the compound interest on Rs 10,000 for $1\frac{1}{2}$ years at 10% per annum, compounded half yearly. Would this interest be more than the interest he would get if it was compounded annually?

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Principal = Rs.10,000

Time = $1\frac{1}{2}$ years

Rate = 10% per annum

CASE 1 Interest on compounded half yearly.

Rate = 10% per annum = 5 % per half yearly

$T= 1\frac{1}{2} years,n=3$

$A= P\left ( 1+\frac{R}{100} \right )^{n}$

$A= 10000\left ( 1+\frac{5}{100} \right )^{3}$

$A= 10000\left ( 1+0.05 \right )^{3}$

$A= 10000\left ( 1.05 \right )^{3}$

$A= 11576.25$ = Amount

CI = Amount - principal

CI = $11576.25-10000$

CI = 1576.25

CASE 2 Interest on compounded anually

Rate = 10% per annum

$T= 1\frac{1}{2} years ,n=1$

$A= P\left ( 1+\frac{R}{100} \right )^{n}$

$A= 10000\left ( 1+\frac{10}{100} \right )^{1}$

$A= 10000\left ( 1+0.1\right )^{1}$

$A= 10000\left ( 1.1\right )^{1}$

$A= 11000$ = Amount

CI = Amount - principal

CI = $11000-10000$

CI = 1000

Interest for half years on 11000 =

$\frac{P\times R\times T}{100}$

$=\frac{11000\times 10\times \frac{1}{2}}{100}$

$= 55\times 10$

= 550

Total interest = $1000+550$

= RS 1550

Since 1576.25 $>$ 1000

Thus, interest would be more in CASE 1 i.e. compounded half yearly

Posted by

seema garhwal

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