Question

Calculate the total amount and compound interest on RS 8,000 for a year at the rate of 9% per annum compounded half yearly.

Answer 1

See below in bold.

Explanation:

Total = A(1 + r/n)^nt where A = initial amount , t = number of years, r = the rate (as a decimal fraction) and n = number of payments a year. So:

Total after 1 year = 8000(1 + 0.09/2) ^ 1*2

= RS 8736.20.

Compound interest = RS 736.20