Analysing the good returns that Halocircle Insurance Pvt Ltd was giving, Ratika bought a 1-year, Rs 10,000 certificate of deposit that paid interest at an annual rate of 8% compounded semi-annually.What was the total amount of interest paid on this certificate at maturity?

• p=10,000 r=8% y=1 years.
  For Compounded Semi-Anually,
  Amount=p(1+(r/2)/100)^2n
  Amount=10,000(1+(8/2)/100)^2
  Amount=10,000(104/100)^2
  Amount=104*104
  
  Interest=104*104-10,000
  Interest=816
  Thus rs.816 will be paid on maturity
• 11 years agoHelpfull: Yes(29) No(1)
• Semiannual means twice a year. So the 8% is split into two:
  4% halfway through the year,
  and another 4% at the end of the year,
  but each time it is compounded (meaning the interest is added to the total)
  
  so according to the question: 10000*4/100 =10400 =interest 400
  10400*4/100=10416 =interest 416
  total =816
  follow the below link
  http://www.mathsisfun.com/money/compound-interest-periodic.html
• 11 years agoHelpfull: Yes(23) No(2)