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

  • math -

    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 ??

  • math -

    answer rate 20%

  • math -

    poorly worded question,
    so the amount 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%

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