Final answer:
The compound interest on Rs40,000 at 16% per annum for 1.5 years, compounded half yearly, is Rs48,686.70.
Step-by-step explanation:
To calculate compound interest, we can use the formula A = P(1 + r/n)^(nt), where:
- A is the total future amount
- P is the principal amount (initial investment)
- r is the annual interest rate (as a decimal)
- n is the number of times interest is compounded per year
- t is the number of years
In this case, we have:
- P = Rs40,000
- r = 16% = 0.16
- n = 2 (compounded half yearly)
- t = 1.5 years
Plugging in the values, we get:
A = 40000(1 + 0.16/2)^(2*1.5) = 40000(1 + 0.08)^3 = 40000(1.08)^3 = 48686.69824
Therefore, the compound interest on Rs40,000 at 16% per annum for 1.5 years, compounded half yearly, is Rs48,686.70.