Explanation

The formula for compound interest is:

A = P(1 + r/100)ⁿ

A = Amount

P = Principal

r = rate of interest

n = conversion period

In the given problem statement :

P = Rs. 1,00,000

r = 5%

n = 6 months

(i) Interest for six months

A = 1,00,000(1 + 5/100)¹

= 1,00,000(1 + 0.05)

= 1,00,000(1.05)

= 1,05,000

Interest for six months = 1,05,000 - 1,00,000

= Rs.5000

(ii) Amount for six Months = Rs. 1,05,000

(iii) Interest for next six months

A = 1,05,000(1 + 5/100)

= 1,05,000(1.05)

= 1,10,250

Interest for next six months = Rs. 1,10,250 - Rs. 1,10,000

= Rs. 5,250

(iv) Amount for One year = Rs. 1,10,250