Find the amount if a sum of Rs.7,500 is invested on compound interest at 8% p.a. for 1.5 years when the interest is compounded half yearly.
Answer & explanation
Correct answer: option 1
Rate of interest if compounded half yearly = \(\frac{8 }{2}\)% = 4%
If interest is compounded half yearly, n = 3
Amount = Principal × ( 1 + \(\frac{rate }{100}\))n
= 7500 × ( 1 + \(\frac{4 }{100}\))3
= 7500 × \(\frac{26 }{25}\) × \(\frac{26 }{25}\) × \(\frac{26 }{25}\)
= Rs. 8436.48