Find the amount and the compound interest on Rs 31250 for $1 \frac{1}{2}$ years at $8 \%$ per annum, compounded half-yearly.
Principal, $P=$ Rs. 31250
Annual rate of interest, $R=8 \%$
Rate of interest for a half year $=\frac{1}{2} \times 8 \%=4 \%$
Time, $n=1 \frac{1}{2}$ years $=3$ half years
Then the amount with the compound interest is given by
A $=P \times\left(1+\frac{R}{100}\right)^{n}$
$=31250 \times\left(1+\frac{4}{100}\right)^{3}$
$=31250 \times\left(1+\frac{1}{25}\right)^{3}$
$=31250 \times\left(\frac{25+1}{25}\right)^{3}$
$=31250 \times\left(\frac{26}{25}\right)^{3}$
$=31250 \times\left(\frac{26}{25}\right) \times\left(\frac{26}{25}\right) \times\left(\frac{26}{25}\right)$
$=$ Rs $2 \times 17576$
$=$ Rs 35152
Therefore, compound interest $=$ amount $-$ principal $=$ Rs $(35152-31250)=$ Rs 3902