Compound Interest Practice Test 4

P = 5,000; R = 10%; T = 2 years
$\mathit{S}\mathit{I}=\frac{5000\times 10\times 2}{100}=1000$
Amount = 5,000 + 1,000 = Rs 6,000
If it is compounded semi-annually then,
Amount $=\mathit{P}{\left(1+\frac{\mathit{R}}{100}\right)}^{\mathit{t}}$
$=5000{\left(1+\frac{5}{100}\right)}^4$
$=5000\times \frac{105}{100}\times \frac{105}{100}\times \frac{105}{100}\times \frac{105}{100}$
= Rs 6,077.53
Sita’s money in her account at the end of two years = 6,077.53 - 6,000 = Rs 77.53