Jaydeep borrows 1600000 from a bank for house construction at 12 1 / 2% per Ann number find the amount he has to pay after 1 year if the interest is calculated half yearly?

Question

Answer

Understanding the Loan Details
Jaydeep borrows an amount of 1,600,000 at an interest rate of 12.5% per annum. The interest is calculated half-yearly, which means the rate needs to be adjusted for each half-year.
Calculating Half-Yearly Interest Rate
- The annual interest rate is 12.5%.
- Half-yearly interest rate = 12.5% / 2 = 6.25%.
Calculating the Interest for One Year
- Since the interest is compounded half-yearly, it will be calculated twice in one year.
First Half-Year Interest
- Principal Amount = 1,600,000
- Interest for the first half-year = Principal x Half-yearly interest rate
- Interest for first half-year = 1,600,000 x 6.25% = 100,000
New Principal After First Half-Year
- New Principal after adding interest = 1,600,000 + 100,000 = 1,700,000
Second Half-Year Interest
- Interest for the second half-year = New Principal x Half-yearly interest rate
- Interest for second half-year = 1,700,000 x 6.25% = 106,250
Total Amount to be Paid After One Year
- Total interest for one year = Interest from first half + Interest from second half
- Total interest = 100,000 + 106,250 = 206,250
- Total amount to be paid after one year = Initial Principal + Total Interest
- Total amount = 1,600,000 + 206,250 = 1,806,250
Final Summary
- Total amount Jaydeep has to pay after one year = 1,806,250.
This detailed breakdown helps Jaydeep understand how the interest accumulates over the year with half-yearly compounding.

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