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Find the compound interest on Rs. 1000 at the rate of 20% per annum for 18 months when interest is compounded half-yearly.
  • a)
    Rs. 331
  • b)
    Rs. 1331
  • c)
    Rs. 320
  • d)
    None of these
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Find the compound interest on Rs. 1000 at the rate of 20% per annum f...
Here P = Rs. 1000, R = 20%, T = 18 months or 1(½) years.
Compound interest when interest is compounded annually
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Most Upvoted Answer
Find the compound interest on Rs. 1000 at the rate of 20% per annum f...
Given data:
Principal amount (P) = Rs. 1000
Rate of interest (R) = 20%
Time period (T) = 18 months = 1.5 years
Number of times interest is compounded in a year (n) = 2 (half-yearly)

Formula:
Compound Interest (CI) = P [ (1 + R/n)^(nT) - 1 ]

Calculation:
Here, n = 2, R = 20%, T = 1.5 years, and P = Rs. 1000

CI = 1000 [ (1 + 20/2)^(2*1.5) - 1 ]
CI = 1000 [ (1 + 10)^(3) - 1 ]
CI = 1000 [ (11)^(3) - 1 ]
CI = 1000 [ 1331 - 1 ]
CI = 1000 x 1330
CI = Rs. 1330000

The compound interest on Rs. 1000 at the rate of 20% per annum for 18 months when interest is compounded half-yearly is Rs. 331.

Therefore, the correct answer is option (A).
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