# What Amount of Money will Discharge?

Raghu borrowed Rs.25,000 at 20% per annum compounded Half-yearly. What amount of money will discharge his debt after one and a half years:

- Rs. 28,275
- Rs. 36,275
- Rs. 33,275
- None of these

**Answer: (3) Rs.33, 275**

**Explanation:-**

**Given – **

Principal = Rs.25,000, Rate = 20 %, Time = 3/2 years. Amount = ?

**Formula-**

**Compound Interest = P [(1 + R/100) ^{t} – 1]**

**Where, P = principal, R = rate, t = time. (If compounded half yearly then, rate become half and time is double)**

Then, Amount = = 25000 (1 + 20/2 x 100)

^{3 }

= 25000 (1 + 1/10)

^{3}

= 25000 (11/10)

^{3}

= 25000 x 11 x 11 x 11/10 x 10 x 10

= 25 x 1331

= Rs.33, 275

Hence, the answer is (3) Rs.33, 275.