Question
P invests Rs. 5,500 on compound interest at 16% p.a.
(compounded semiannually) for 1 year. Find the interest earned by 'P'.Solution
ATQ, Effective time = 2 × 1 = 2 terms Effective rate of interest = 16 × (1/2) = 8% 
Or, compound interest = 5,500 × (1.08)2 - 5,760 Or, compound interest = 6,415.2 - 5,760 = Rs. 655.20
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