What amount will be received on a sum of ₹ 1750 in 2 1/ 2 yr, if the interest is compounded at the rate of 8% pa?
Correct Answer: ₹ 2122.85
Explanation:
Given, P = ₹ 1750, R = 8%,
n = 2 and a/b = 1/2
According to the formula,
Amount = P(1 + R/100)n x [1 + {(a/b) x R}/100]
=1750 (1 + 8/100 )2 [1 + {(1/2) x 8} /100]
=1750 (27/25)2 x 26/25
= 1750 x (27/25) x (27/25) x (26/25)
=₹ 2122.848
= ₹ 2122.85