Find the amount payable on maturity if ₹20,00,000 is invested at 12% per annum for $\frac{3}{2}$ years and interest is compounded half yearly.
Answer & explanation
Correct answer: option 2
Interest is compounded half yearly,
Compound interest = \(\frac{12}{2}\)% = 6%
From the formula for compound interest, we know,
Amount = P(1+$\frac{R}{100})^t$
= 2000000 [ 1 + \(\frac{6}{100}\) ]³ × [ 1 + \(\frac{6}{100}\) ]
= 2000000 [ \(\frac{53}{50}\) × \(\frac{53}{50}\) × \(\frac{53}{50}\)
]
= Rs. 23,82,032