How much should a sum of Rs 16000 approximately amount to in 2 years at 10% pa compounded half yearly?

shivali naryal

How much would a sum of Rs. 16000 approximately amount to in 2  years at 10% p.a. compound half yearly?

(a) Rs. 17423 (b) Rs. 18973  (c) Rs. 19448  (d) Rs. 19880

Category : Arithmetics | Answer: 1 5 Years Ago

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Answer : P = Rs. 16000, R = (10/2) % per half year , t = 4 half years

Amount = Rs. {16000  x (1 + 5/100)4} = Rs. 16000 x 21/20 x 21/20 x 21/20 x 21/20)

• 19448.10 = Rs. 19448. Hence the answer is (c)

5 Years Ago

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The power of compounding grows your savings faster

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• Save more with compound interest
• Compound interest formula
• How to calculate compound interest

3 minutes

The sooner you start to save, the more you'll earn with compound interest.

Compound interest is the interest you get on:

• the money you initially deposited, called the principal
• the interest you've already earned

For example, if you have a savings account, you'll earn interest on your initial savings and on the interest you've already earned. You get interest on your interest.

This is different to simple interest. Simple interest is paid only on the principal at the end of the period. A term deposit usually earns simple interest.

Save more with compound interest

The power of compounding helps you to save more money. The longer you save, the more interest you earn. So start as soon as you can and save regularly. You'll earn a lot more than if you try to catch up later.

For example, if you put $10,000 into a savings account with 3% interest compounded monthly:

• After five years, you'd have $11,616. You'd earn $1,616 in interest.
• After 10 years you'd have $13,494. You'd earn $3,494 in interest.
• After 20 years you'd have $18,208. You'd earn $8,208 in interest.

Compound interest formula

To calculate compound interest, use the formula:

A = P x (1 + r)n

A = ending balanceP = starting balance (or principal)r = interest rate per period as a decimal (for example, 2% becomes 0.02)

n = the number of time periods

How to calculate compound interest

To calculate how much $2,000 will earn over two years at an interest rate of 5% per year, compounded monthly:

1. Divide the annual interest rate of 5% by 12 (as interest compounds monthly) = 0.0042

2. Calculate the number of time periods (n) in months you'll be earning interest for (2 years x 12 months per year) = 24

3. Use the compound interest formula

A = $2,000 x (1+ 0.0042)24A = $2,000 x 1.106

A = $2,211.64

Lorenzo and Sophia compare the compounding effect

Lorenzo and Sophia both decide to invest $10,000 at a 5% interest rate for five years. Sophia earns interest monthly, and Lorenzo earns interest at the end of the five-year term.

After five years:

• Sophia has $12,834.
• Lorenzo has $12,500.

Sophia and Lorenzo both started with the same amount. But Sophia gets $334 more interest than Lorenzo because of the compounding effect. Because Sophia is paid interest each month, the following month she earns interest on interest.

Find the amount and the compound interest on Rs 160000 for 2 years at 10% per annum, compounded half yearly.

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A person invests Rs 16,000 for 15 months at the rate of 12% per annum compounded every 5 months. By what percent will his income increase at the end of 15 months?

1. 15%
2. 16.2%
3. 15.6%
4. 15.8%

Answer (Detailed Solution Below)

Option 4 : 15.8%

Free

SSC CGL 2021 Tier-I (Held On : 11 April 2022 Shift 1)

100 Questions 200 Marks 60 Mins

Given:

The principle = 16000

The rate of interest = 12% per annum

The time = 15 months

Formula used:

Compounded amount = P × (1 + R/100)T

(Where, P = Principle, R = Rate, and T = Time)

Calculation:

⇒ The rate of interest when compounded every 5 months = (12/12) × 5 = 5% every five-month

⇒ The time according every 5 month = 15/5 = 3

The compounded amount = 16000 × (1 + 5/100)3 = 16000 × (105/100)3

⇒ 16000 × (1157625/1000000) = 16000 × 1.157625 = 18522

The required % = \({18522\ -\ 16000\ \over 16000} \times 100\) = 15.7625 ≈ 15.80%

∴ The required result will be 15.80%.

Last updated on Oct 8, 2022

The SSC CGL 2022 application date date extended till 13th October 2022. The SSC CGL Notification was out on 17th September 2022. The SSC CGL Eligibility will be a bachelor’s degree in the concerned discipline. This year, SSC has completely changed the exam pattern and for the same, the candidates must refer to SSC CGL New Exam Pattern.

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