Q. 83.8( 42 Votes )

Michael borrowed Rs.16000 from a finance company at 10% per annum, compounded half-yearly. What amount of money will discharge his debt after 1years?

Answer :

Present value = Rs.16000


Interest rate = 10% per annum


Time = (3/2) years


Interest is compounded half-yearly.


Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value


R = Annual interest rate


n = Time in years]


A = 16000 [1 + (10/2)/100]3


A = 16000 [1 + 5/100]3


A = 16000 [1 + 1/20]3


A = 16000 [21/20]3


A = 16000 × 21/20 × 21/20 × 21/20


A = 2 × 21 × 21 × 21


A = 18522


Amount = Rs.18522


Rate this question :

How useful is this solution?
We strive to provide quality solutions. Please rate us to serve you better.
Related Videos
Concept of Compound Interest50 mins
Quiz | Calculating Compound Interest Really Compound?46 mins
Taxes, Discount and Compound Interest34 mins
Goprep Genius Quiz | Taxes, Discount and Compound Interest25 mins
Become Proficient in Simple Interest36 mins
One Step Ahead of Simple Interest44 mins
Try our Mini CourseMaster Important Topics in 7 DaysLearn from IITians, NITians, Doctors & Academic Experts
Dedicated counsellor for each student
24X7 Doubt Resolution
Daily Report Card
Detailed Performance Evaluation
view all courses
RELATED QUESTIONS :