Find the compound interest on Rs. 1000 at the rate of 20% per annum for 18 month when interest is compounded half yearly.

Solution(By Examveda Team)

$$\eqalign{ & {\text{Given,}}\,{\text{Principal}},\,P = Rs.\,1000 \cr & {\text{Compoind}}\,{\text{rate}},\,R = 20\% \,{\text{per}}\,{\text{annum}} \cr & = \frac{{20}}{2} = 10\% \,{\text{half - yearly}} \cr & {\text{Time}} = 18\,{\text{month}} = 3\,{\text{half - years}} \cr & {\text{Amount}}, \cr & A = \left\{ {P \times {{\left[ {1 + \left( {\frac{R}{{100}}} \right)} \right]}^n}} \right\} \cr & = \left\{ {1000 \times {{\left[ {1 + \left( {\frac{{10}}{{100}}} \right)} \right]}^3}} \right\} \cr & = { {\frac{{1000 \times 11 \times 11 \times 11}}{{10 \times 10 \times 10}}} } \cr & A = Rs.\,1331 \cr & {\text{Hence,}}\,{\text{compound}}\,{\text{interest}} = Rs.\,331 \cr} $$