KnowledgeBoat Logo
|

Mathematics

₹10000 was lent for one year at 10% per annum. By how much more will the interest be, if the sum was lent at 10% per annum, interest being compounded half-yearly?

Compound Interest

82 Likes

Answer

When interest is compounded yearly,

P = ₹10000, r = 10%, T = 1.

C.I. = 10000×10×1100\dfrac{10000 \times 10 \times 1}{100} = ₹1000.

When interest is compounded half-yearly,

P = ₹10000, r = 10%2\dfrac{10\%}{2} = 5%, T = 2.

For first half-year,

C.I. = 10000×5×1100\dfrac{10000 \times 5 \times 1}{100} = ₹500.

Amount after first half-year = ₹1000 + ₹500 = ₹1500.

Principal for second half-year = ₹1500.

C.I. = 10500×5×1100\dfrac{10500 \times 5 \times 1}{100} = ₹525.

Amount after second half-year = ₹1500 + ₹525 = ₹2025.

C.I. = Final amount - Principal = ₹2025 - ₹1000 = ₹1025.

Difference in C.I. in both cases = ₹1025 - ₹1000 = ₹25.

Hence, the interest would be ₹25 more, if the sum was lent at 10% per annum, interest being compounded half-yearly.

Answered By

31 Likes

Related Questions