Arif took a loan of ₹ 80,000 from a bank. If the rate of interest is 10% per annum, find the difference in amounts he would be paying after 3/2 years if the interest is: (i) compounded annually. (ii) compounded half yearly.

(i) Here,
Principal (P) = ₹ 80,000, Time (n) = 1(1/2) years, Rate of interest (R) = 10%
Amount for 1 year (A) = P (1+R/100)ⁿ = 80000 (1+10/100)¹ = 80000(1+1/10)¹
= 80000 (11/10)¹ = ₹ 88,000
Interest for 1/2 year = 88000x10x1/100×2 = ₹ 4,400
Total amount = ₹ 88,000 + ₹ 4,400 = ₹ 92,400

(ii) Here, Principal (P) = ₹ 80,000,
Time (n) = 1(1/2) year = 3 half-years (compounded half yearly)
Rate of interest (R) = 10% = 5% (compounded half yearly)
Amount (A) = P(1+R/100)ⁿ = 80000(1+5/100)³ = 80000(1+1/20)³
= 80000(21/20)³ = 80000 x 21/20 x 21/20 x 21/20 = ₹ 92,610
Difference in amounts = ₹ 92,610 – ₹ 92,400 = ₹ 210

Class 8 Maths Chapter 8 Exercise 8.3 Solution in Video

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