Rs. 6000 is lent at the rate of 20 percent per annum on compound interest (compounded half yearly). What will be the compound interest of 18 months?

Rs. 1986

Rate of compound interest compounded half yearly =  \(\frac{20 }{2}\)% = 10%

For 18 months ( Compounded half yearly) ,  n = 3

Amount = Principal × ( 1 + \(\frac{rate }{100}\) )ⁿ

= 6000 × ( 1 + \(\frac{10 }{100}\) )³

= 6000 × \(\frac{11 }{10}\) × \(\frac{11 }{10}\) × \(\frac{11 }{10}\)

= Rs. 7986

We know ,

Amount = Principal + Interest

7986 = 6000 + Interest

Interest = 7986 - 6000 = 1986