Compound Interest Half Yearly


 
 
Concept Explanation
 

Compound Interest Half Yearly

Compound interest:

Compound interest is calculated by adding the interest to the previous principal to get the new principal for the next definite period of time,

Calculating Interest Compound Half Yearly:

In this case the rate is halved and the time is doubled in years.

1. Find the compound interest on Rs. 5000 for 18 months at 8% per annum, compounded half yearly.

Principal= Rs 5000

Time = 18 months

       large =frac{18}{12}; years=frac{18}{12} X 2= 3; times

Rate = 8 % = 4 % when compounded half yearly

large amount = principalleft [ 1+frac{rate} {100}right ]^{time}

large amount = 5000left [ 1+frac{4} {100}right ]^{3}

large = 5000left [ 1+frac{1} {25}right ]^{3}

large = 5000left [ frac{26} {25}right ]^{3}

large = 5000 ;X; frac{26} {25} ;X; frac{26} {25} ;X; frac{26} {25}=5624.32

Sample Questions
(More Questions for each concept available in Login)
Question : 1

In how many years will a sum of Rs. 800 at 10% per annum compounded semi - annually become Rs. 926.10 ?

Right Option : B
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Explanation
Question : 2

Sam invested Rs. 15000 at the rate of 10% per annum for one year. if the interest is compounded half - yearly, then the amount received by sam at the end of the year will be :

Right Option : C
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Explanation
Question : 3

What is the difference between the compound interests on Rs. 5,000 for 1frac{1}{2} years at 4% per annum componded yearly and half - yearly ?

Right Option : A
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Explanation
 
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