Question 123

A sum of ₹x amount to ₹12,777.60 in 2 years at 15%p.a., when the interest is compounded eight-monthly. The value of x is

Solution

Interest is compounded eight-monthly so

Time(t) = $$\frac{2 \times 12}{8} = 3$$

Rate of interest = $$15 \times \frac{8}{12} = 10%$$

Amount = $$P(1 + \frac{rate}{100})^T$$

$$12777.60 = x(1 + \frac{10}{100})^3$$

$$x(\frac{11}{10})^3 = 12777.6$$

$$x = \frac{12777.6}{1.331} = 9600$$

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