1.

A certain sum invested at 4% per annum compound interest, compounded half-yearly, amounts to Rs 7803 after the end of one year. The sum is?1). 70002). 72003). 75004). 7700

Answer»

We have R = 4 % per annum or 2 % per HALF-year

T = 2 CYCLES of half YEARS. Hence we take t = 2.

P = ?

Amount = RS 7803

We have the formula for compound interest

Amount $(= P{\left( {1 + \frac{R}{{100}}} \right)^T})$

Where P is the principal

T is the time

R is the rate of interest

⇒ 7803 = P ( 1 + 2/100)2

⇒ 7803 = P × 1.02 × 1.02

⇒ P = 7803/1.0404

⇒ P = Rs 7500


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