Let Principal = P, Rate = R % per annum (p.a.) and Time = n years. Then,
I. When interest is compound Annually:
Amount = P(1+R/100)n
II. When interest is compounded Half-yearly:
Amount = P[1+(R/2)/100]2n
III. When interest is compounded Quarterly:
Amount = P[ 1+(R/4)/100]4n
Question 1
Q1. A bank offers 5 % compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:
