What will be the amount after 2 years, if a sum of Rs.2,200 is invested at 12% per annum compound interest, compounded half-yearly (correct to two decimal places)?
1. Rs.2,766.18
2. Rs.2,733.45
3. Rs.2,777.45
4. Rs.2,755.76
1. Rs.2,766.18
2. Rs.2,733.45
3. Rs.2,777.45
4. Rs.2,755.76
Correct Answer – Option 3 : Rs.2,777.45
Given:
Sum = 2200
Rate of interest = 12%
Number of years = 2 years compounded half yearly
Concept:
In compound interest half yearly means the rate of interest is get halved
Formula used:
Amount = P[(1 + {(R/2) × 1/100})2n]
Calculations:
Amount = 2200[(1 + {(12/2) × 1/100})2 × 2)
⇒ Amount = 2200 (1 + 6/100)4
⇒ Amount = 2200 × 106 × 106 × 106 × 106/(100 × 100 × 100 × 100)
⇒ Amount = 2777.449 ≈ 2777.45
∴ The amount after 2 years is Rs. 2777045