Question

A person invested 1100 rs in a company at compound interest compounded semi-annually.he received rs 1331 after one year.rate% is?

Answer 1

let the semi-annual rate be i
amount after 1 year = 1100(1 + i)^2
interest = 1100(1 + i)^2 - 1100 = 1331

1100(1 + i)^2 = 2431
(1+i)^2 = 2.21
1+i = √2.21 = appr 1.4866
i = .4866

WOW, annual rate is .4866(2) = .9732 or 97% ?????

check: 1100(1.4866..)^2 = 2430.98
interest = 1330.98 or 1331 rs

Seems unreasonable high to me, do you have a typo ??

Answer 2

answer rate 20%

Answer 3

poorly worded question,
so the <b>amount</b> is 1331 rs, then

1100(1+i)^2 = 1331
(1+i)^2 = 1.21
1+i = √1.21 = 1.1
i = .1 or 10%
so the annual rate is 20%