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?
principal = 10000/-
rate of interest = 10% per annum
time = 1 1/2 years = 3 half yearly.
if compounded half yearly, amount =
thus interest = 11576.25 - 10000 = 1576.25/-
case II; if amount is compounded yearly.
amount at the end of 1st year =
interest for the half year =
thus the total interest when compounded annually
= (11000-10000)+550
=1000+550
=1550/-
thus the interest is more when compounded half yearly.
hope this helps you
rate of interest = 10% per annum
time = 1 1/2 years = 3 half yearly.
if compounded half yearly, amount =
thus interest = 11576.25 - 10000 = 1576.25/-
case II; if amount is compounded yearly.
amount at the end of 1st year =
interest for the half year =
thus the total interest when compounded annually
= (11000-10000)+550
=1000+550
=1550/-
thus the interest is more when compounded half yearly.
hope this helps you