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Payment Rs. 10000 each yearRate 5% annuallyTime 2 yearsAmount paid in the beginning and compounding half yearly, find the amount at the end of the period?Options :42563.29-42563.29-41525.1641526.16

Question

Payment Rs. 10000 each yearRate 5% annuallyTime 2 yearsAmount paid in the beginning and compounding half yearly, find the amount at the end of the period?Options :42563.29-42563.29-41525.1641526.16

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Solution

The problem is about compound interest with semi-annual compounding. Here's how you can solve it:

Step 1: Identify the given values. Principal (P) = Rs. 10000 Annual interest rate (r) = 5% or 0.05 Number of compounding periods per year (n) = 2 (since it's compounded semi-annually) Total number of periods (t) = 2 years

Step 2: Convert the annual interest rate to the rate per period by dividing by the number of compounding periods per year. r/n = 0.05/2 = 0.025

Step 3: Calculate the total number of compounding periods by multiplying the number of years by the number of compounding periods per year. nt = 2*2 = 4

Step 4: Use the formula for compound interest to calculate the final amount (A). A = P(1 + r/n)^(nt) A = 10000(1 + 0.025)^4

Step 5: Calculate the value. A = 10000(1.025)^4 A = 10000*1.103812890625 A = Rs. 11038.13

So, the amount at the end of the period would be Rs. 11038.13. None of the options provided match this result. Please check the problem statement and the options again.

This problem has been solved

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