Question:
Abha purchased a house from Avas Parishad on credit. If the cost of the house is Rs 64000 and the rate of interest is 5% per annum compounded half-yearly, find the interest paid by Abha after one year and a half.
Solution:
Given:
$\mathrm{P}=\mathrm{Rs} 64,000$
$\mathrm{R}=5 \%$ p. a.
$\mathrm{n}=1.5$ years
When the interest is compounded half - yearly, we have :
$\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{200}\right)^{2 \mathrm{n}}$
$=$ Rs $64,000\left(1+\frac{5}{200}\right)^{3}$
$=$ Rs $64,000(1.025)^{3}$
$=$ Rs 68,921
Also,
$\mathrm{CI}=\mathrm{A}-\mathrm{P}$
$=$ Rs $68,921-$ Rs 64,000
$=$ Rs 4,921
Thus, the required interest is Rs 4,921 .