Q.Find the amount on ₹12,000 for 6 months at 12% per annum, compounded monthly.

For monthly compounding, the per-month rate is $\dfrac{12}{12} = 1\%$ and the number of periods is 6.

Given: $P = 12000$, nominal $R = 12\%$ p.a., time $= 6$ months, compounded monthly.

Adjust for monthly compounding. Rate per month $r = \dfrac{12}{12} = 1\%$; number of periods $m = 6$ (six months).

Method 1 — formula.

$A = P\left(1 + \dfrac{r}{100}\right)^{m} = 12000(1.01)^{6} = 12000 \times 1.06152015 = 12738.24.$ …

Using 12% and 6 directly, or forgetting to convert 6 months into 6 monthly periods. The rate per mon …