In what time will a sum of ₹1,25,000 amount to ₹1,48,877 at 12% per annum, if interest is being compounded half yearly?
Answer & explanation
Correct answer: option 1
Interest is compounded half yearly . So actual rate of interest = 6%
With compound interest ,
Amount = P$(1 \;+\; \frac{R}{100})^t$
148877 = 125000[ 1 + \(\frac{6}{100}\) ]
\(\frac{53}{50}\)³ = [ \(\frac{53}{50}\) ]t
So, t = 3 years .