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Vasudevan invested Rs. 60,000 at an interest rate of 12% per annum compounded half-yearly, what amount would he get
(i)After 6 months
(ii)After 1 year

Answer
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Hint: Here we will use the formula to find the amount A is A=P(1+R100)n where A is the amount, P is principal, R is the rate of interest and n is the time period. Here we will take n=1 for the amount after six months and n=2 for the amount after one year, since the rate of interest is compounded half yearly.

Complete step-by-step answer:
Given that-
Principal, P=Rs 60,000
Rate of interest, R=12% per annum
R=6% per6 months
(i)After 6 months
Here, the interest is calculated half-yearly, n=6months = 1
Place values in the formula –
A=P(1+R100)n
A=60000×(1+6100)1
Take LCM (Least common multiple) and simplify the above equation –
A=60000×(100+6100)1A=60000×(106100)1
Convert the above fraction in the decimal form-
A=60000×(10.6)
Simplify the above equation-
A=63600 Rs.
(ii)After 1 year
Here, the interest is calculated half-yearly, n=12months = 2
Place values in the formula –
A=P(1+R100)n
A=60000×(1+6100)2
Take LCM (Least common multiple) and simplify the above equation –
A=60000×(100+6100)2A=60000×(106100)2
Convert the above fraction in the decimal form-
A=60000×(10.6)2
Simplify the above equation-
A=67416 Rs.
Hence, Vasudevan will get Rs. 63600 and Rs. 67416 respectively after six months and one year.

Note: Always convert the percentage rate of interest in the form of fraction or the decimals and then substitute further for the required solutions. Remember the difference between simple interest and compound interest and apply its concept wisely. Compound interest is the interest paid for the interest earned in the previous year. Be good in multiples and do simplification carefully. Do not forget to write the unit Rupees after calculation.
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