Question

find the compound interest on rs 6950 for 3 years if the interest is payable half yearly,the rate for the first two years being 6% p.a and for the third year 9% p.a

Answer 1

Rs 2150.81.

Explanation:

The interest rate for the first two years is 6% per annum, which is halved for each six-month period. Therefore, the interest for the first two years would be (6950*(1+(0.03))^8) - 6950 = Rs 1373.53.

For the third year, the interest rate is 9% per annum, which is also halved for each six-month period. Therefore, the interest for the third year would be (6950*(1+0.045))^2 - 6950 = Rs 777.28.

Hence, the total compound interest for three years would be Rs 2150.81.