Question

What will be the amount to be paid at the end of 3 years on Rs. 500 at 10% per annum compounded half-yearly?

a. Rs. 665.50
b. Rs. 661.25
c. Rs. 671.00
d. Rs. 678.12

Answer 1

To calculate the amount to be paid at the end of 3 years with compound interest, we can use the formula A = P(1 + r/n)^(nt).

Plugging in the values, the amount to be paid is approximately Rs. 670.048.

Step-by-step explanation:

To calculate the amount to be paid at the end of 3 years with compound interest, we can use the formula:

A = P(1 + r/n)nt

Where:

1. A is the amount
2. P is the principal amount (Rs. 500)
3. r is the rate (10% = 0.1)
4. n is the number of times interest is compounded per year (2, since it is compounded half-yearly)
5. t is the time in years (3)

Plugging in the values, we get:

A = 500(1 + 0.1/2)2*3

A = 500(1 + 0.05)6

A = 500 * 1.340096

A = 670.048

Therefore, the amount to be paid at the end of 3 years is approximately Rs. 670.048.