Rs. 62500 for 2 years 6 months at 12% per annum compounded annually.

1.	Rs. 62500 for 2 years 6 months at 12% per annum compounded annually.
Answer» Present value = Rs.62500 Interest rate = 12 % per annum Time = 2 years 6 month = (2 + 1/2) years = (5/2) years Amount (A) = P (1 + R/100)ⁿ [Where, P = Present value R = Annual interest rate n = Time in years] ∴ A = 62500 (1 + 12/100)² × [1 + (1/2 × 12)/100] ⇒ A = 62500 (1 + 3/25)² × [1 + 6/100] ⇒ A = 62500 (28/25)² × [106/100] ⇒ A = 62500 × 28/25 × 28/25 × 106/100 ⇒ A = 625 × 784/625 × 106 ⇒ A = 1 × 784 × 106 ⇒ A = 83104 ∴ Amount = Rs.83104 ∴ Compound interest = Rs.(83104 – 62500) = Rs.20604

Answer»

Present value = Rs.62500

Interest rate = 12 % per annum

Time = 2 years 6 month = (2 + 1/2) years = (5/2) years

Amount (A) = P (1 + R/100)ⁿ [Where, P = Present value

R = Annual interest rate

n = Time in years]

∴ A = 62500 (1 + 12/100)² × [1 + (1/2 × 12)/100]

⇒ A = 62500 (1 + 3/25)² × [1 + 6/100]

⇒ A = 62500 (28/25)² × [106/100]

⇒ A = 62500 × 28/25 × 28/25 × 106/100

⇒ A = 625 × 784/625 × 106

⇒ A = 1 × 784 × 106

⇒ A = 83104

∴ Amount = Rs.83104

∴ Compound interest = Rs.(83104 – 62500)

= Rs.20604

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