Q. 84.3( 72 Votes )

Arif took a loan of Rs. 80,000 from a bank. If the rate of interest is 10% per annum, find the difference in amounts he would be paying after 1years, if the interest is compounded annually and compounded half yearly.

Answer :

For compounded Annually

Principal (P) = Rs. 80000


Time period (n) = 1


Rate of interest (R) = 10%




= 80000×1.053


= 88000


Amount for 1 year = Rs. 88000


Interest for remaining 6 months =


= 4400


Amount for 1.5 years = Rs. 88000+4400 = Rs. 92400



= 92400-80000


Compound Interest = Rs. 12400


For compounded half yearly


Principal (P) = Rs. 80000


Time period (n) = 3


Rate of interest (R) for half year = 10%× = 5%




= 80000×1.053


= 92610


Amount = Rs. 92610



= 92610-80000


Compound Interest = Rs. 12610


the difference in amounts = amount for For compounded half yearly - amount for For compounded annually


= 92610-92400


= Rs. 210


The difference in amounts is Rs. 210


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