At what rate of compound interest per annum, sum of Rs 20000 becomes Rs 23152.50 in 1 year 6 months compounded half yearly?
Answer & explanation
Correct answer: option 1
Amount = P$(1 + \frac{R}{100})^t$
Here, Amount = Rs 23152.50
P = Rs 20000
Time = 1 year 6 months = 3 compounds because it is compounded half yearly
Thus,
23152.50 = 20000$(1 + \frac{R}{100})^3$
$\frac{23152.50}{20000} = (1 + \frac{R}{100})^3$
$\sqrt[3]{\frac{23152.50}{20000} } = \frac{100 + R}{100}$
Solving, R = 5%
Rate of compound interest per annum = 10% per annum