Find the compound interest on Tk. 2,000 at the rate of 20% per annum for 18 months when interest is compounded half yearly?

Question: Find the compound interest on Tk. 2,000 at the rate of 20% per annum for 18 months when interest is compounded half yearly?

Solution:
Given that,
principal P = Tk. 2,000
Compound rate, r = 20% per annum = 20%/2 half-yearly = 10% half-yearly
Time 18 month = 3 half-years

Amount,
C = P{1 + (r/100)}ⁿ
= 2,000{1 + (10/100)}³
= 2,000(11/10)³
= 2,000 × 1331/1000
= 2,662

Hence, compound interest = Tk. (2,662 - 2,000)
= Tk. 662