Explanation:
Given:
Present value =₹ 40000
Interest rate =6% per annum
Time =6 months
To find the amount we have the formula,
Amount (A)=P(1+(r/100))n
where P is present value, r is rate of interest, n is time in years
Now substituting the values in above formula we get,
∴A=40000(1+(6/4)/100) ²
⇒A=40000(1+3/200)²
⇒A=40000(203/200)²
⇒A=40000(203/200) ²
⇒A=203×203
⇒A=₹ 41209
∴ Compound interest =A–P
=41209–40000=₹ 1209