Rs. 20000 is lent at compound interest at an annual rate of 16 percent for 1 year. If the compounding of interest is done half yearly, then how much interest will be obtained?

Rs.3328

Amount = P(1 + \(\frac{ r/2 }{100}\) )^2t

= 20000 (1 + \(\frac{ 16 }{200}\) )^2*1

= 20000 (\(\frac{ 108 }{100}\))²

= 20000 * \(\frac{ 27 }{25}\) * \(\frac{ 27 }{25}\)

= 23328

CI = Amount – Principal = Rs.23328 – 20000 = Rs.3328