If principle = Rs 1,00,000, rate of interest = 10% compounded half yearly. find the amount after one year.
Answer: Rs. 110250
Explanation
The formula for compound interest is:
A = P(1 + r/100)ⁿ
A = Amount
P = Principal
r = rate of interest
n = conversion period
In the given problem statement :
P = Rs. 1,00,000
r = 5%
n = 6 months
(i) Interest for six months
A = 1,00,000(1 + 5/100)¹
= 1,00,000(1 + 0.05)
= 1,00,000(1.05)
= 1,05,000
Interest for six months = 1,05,000 - 1,00,000
= Rs.5000
(ii) Amount for six Months = Rs. 1,05,000
(iii) Interest for next six months
A = 1,05,000(1 + 5/100)
= 1,05,000(1.05)
= 1,10,250
Interest for next six months = Rs. 1,10,250 - Rs. 1,10,000
= Rs. 5,250
(iv) Amount for One year = Rs. 1,10,250
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