A bank offers 6.8% compound interest per annum calculated on a half-yearly basis. A customer deposits ₹3,485 each on 1 January and 1 July of a year. At the end of the year, the amount he would have gained by way of interest is: (round off to two decimal places)
₹359.50
Interest is compounded half-yearly, so the rate per half-year is 6.8 ÷ 2 = 3.4%, i.e. a growth factor of 1.034.
The deposit of ₹3,485 made on 1 January stays for two half-years: 3,485 × (1.034)2 = 3,485 × 1.069156 = ₹3,726.01.
The deposit of ₹3,485 made on 1 July stays for one half-year: 3,485 × 1.034 = ₹3,603.49.
Total amount at the end of the year = 3,726.01 + 3,603.49 = ₹7,329.50, while the total deposited is 3,485 × 2 = ₹6,970.
Interest gained = 7,329.50 − 6,970 = ₹359.50.
Hence, the answer is ₹359.50.
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Important Questions from Compound Interest
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In how many years will a sum of Rs.1875 amount to Rs.2187 at 8 percent p.a. compound interest?
A sum of money has increased by 45% in 9 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate?
At a certain rate of compound interest a certain sum amounts to Rs. 64800 in 4 years and Rs. 93312 in 6 years. What is the compound interest earned in fifth year?
