Question

Find the amount on Rs. 16,000 at 12% per annum for 1 year, compounded half-yearly.

Solution

1. For half-yearly compounding, rate per half-year = 12/2 = 6%.
2. There are 2 half-years in one year.
3. Amount = 16,000 x (1.06)^2 = Rs. 17,977.60.