What sum will become 9,826 in 18 months if the rate of interest is 2 1/2 % per annum and the interest is compounded half-yearly?

What sum will become 9,826 in 18 months if the rate of…

What sum will become 9,826 in 18 months if the rate of interest is 2 $\frac{1}{2}$ % per annum and the interest is compounded half-yearly?

Show answer & explanation

Correct answer: D

Explanation

The correct answer is option 4 i.e. ₹9,466.55

Interest rate per annum = 2 $\frac{1}{2}$ % = (5/2)%

R = (5/2)/2 = (5/4)%

n = 18 months = 3

A = P (1 + R/100)ⁿ

9826 = P(1 + 5/400)³

9826 = P(81/80)³

P = 9826 × (80/81)³ ≈ 9466.55