What will be the compound interest of Tk. 3500 in 2 years at 20% per annum if the interest is compounded half - yearly?

Question: What will be the compound interest of Tk. 3500 in 2 years at 20% per annum if the interest is compounded half - yearly?

Solution:
P =3500
r = 20% = 10% half - yearly
n = 2 years = 4 half - yearly

we know,
C = P(1 + r)ⁿ
= 3500 ( 1 + 10/100)⁴
= 3500 (11/10)⁴
= 5124.35
∴ compound interest = 5124.35 - 3500 = 1624.35 Tk.