Question 132

On what sum of money. the interest for one year at 12% p.a. compounded half yearly is ₹ 1,545?

Solution

In compound interest,

Final amount,A$$=P(1+r/n)^nt$$.

where P is principal amount,r is rate of interest,n is number of times interest applied and t is number of times period elapsed.

So,interest gain$$=A-P.$$

So,$$P(1+0.12/2)^2-P=1545.$$

or,$$P×1.1236-P=1545.$$

or,$$P=(1545/0.1236).$$

or,$$P=12500.$$

A is correct choice.

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