Question:
Find the rate percent per annum if Rs 2000 amount to Rs 2662 in $1 \frac{1}{2}$ years, interest being compounded half-yearly?
Solution:
Let the rate of interest be $\mathrm{R} \%$.
Then,
$\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$2,662=2,000\left(1+\frac{\mathrm{R}}{100}\right)^{3}$
$\left(1+\frac{\mathrm{R}}{100}\right)^{3}=\frac{2,662}{2,000}$
$\left(1+\frac{\mathrm{R}}{100}\right)^{3}=1.331$
$\left(1+\frac{\mathrm{R}}{100}\right)^{3}=(1.1)^{3}$
$\left(1+\frac{\mathrm{R}}{100}\right)=1.1$
$\frac{\mathrm{R}}{100}=0.1$
$\mathrm{R}=10$
Because the interest rate is being compounded half - yearly, it is $20 \%$ per annum.