A man lends Rs. 5,500 at the rate of 8% per annum. Find the amount if the interest is compounded half-yearly and the duration is one year.
Solution
Principal (P)=Rs. 5500
Rate = 8% p.a. or 4% half-yearly
Period 1 year or 2 half years
interest- PRT/ 100
5500×4×1/100 -
= Rs. 220 ..
Amount after first half year = Rs. 5500 + 220
= Rs. 5720 000
= Rs. 5720 or principal for the second half year Interest Rs - 5720×4x1/ 100
=1144/5
= Rs. 228.80
5 .. Amount after 2nd half year
=Rs. 5720+228.80=Rs. 5948.80