At what rate will Rs.2000 amount to Rs.2315.25 in 3 years at compound interest? (2024)
Hint- In this question we should know at first we should take a look at the given values and then we should apply the formula of compound interest i.e $A = P{\left( {1 + r} \right)^t}$ which will help to solve the question, but before we also mention the values to be substituted to find the rate.
Complete step-by-step answer: So it is given to us that Rs. 2000 amounts to 2315.25 in 3 years at compound interest. Now we have to find out what percent will it be. Using compound interest formula, $A = P{\left( {1 + r} \right)^t}$ Where A is the amount A= 2315.25 P is the principle P= 2000 r is the rate r=? t is the time t= 3 years Substitute the values, $ \Rightarrow A = P{\left( {1 + r} \right)^t} \\ \Rightarrow 2315.25 = \left( {2000} \right){\left( {1 + r} \right)^3} \\ \Rightarrow {\left( {1 + r} \right)^3} = 1.1576 \\ \Rightarrow 1 + r = 1.05 \\ \Rightarrow r = 0.05 \\ \Rightarrow r = 5\% \\ $ Therefore, Rate = 5%.
Note- In this question one should know that generally there is also n (number of time interest applied per time period) in the formula of compound interest which we didn’t use as it was not given and not required. Then be aware while putting the values as it can lead to mistakes.
For example, if you have an investment that earns 5% compound interest and you want to know how much money you'll have after 3 years, you would plug the following values into the formula: A = P(1 + r/n)^nt. A = 1000(1 + 0.05/1)^3. A = 1000(1.05)^3.
For example, assume you have a loan with a $10,000 principal balance, a 10% interest rate and three-year term. Using the simple interest formula, you'd pay $3,000 in interest (10,000 x 0.10 x 3).
An amount may be invested for more than one year. To work out the total by the end of the investment period, calculate the interest for the first year and add it to the total.Then calculate the new interest for the second year and add that to the total.Repeat this for each year of investment.
So for this, p = 2000, r = 10, t = 1 year and n = 2 times. Now this amount will be used as the principal amount for the next half year. Hence the amount is Rs 2541 and the compound interest is Rs 541.
2142.40− Rs. 2000= Rs.142.40. If the rate of interest be 4% per annum for first year, 5% per annum for second year, and 6% per annum for third year, then what is the compound interest on Rs.
at what rate percent per annum will a sum of rupee 1000 amounts to rupee 1331 in 3 years, compounded annually. Given P = 1000, n = 3 years, A = 1331 rupees. r = 10. Therefore, the required rate of interest per annum is 10%.
Introduction: My name is Nicola Considine CPA, I am a determined, witty, powerful, brainy, open, smiling, proud person who loves writing and wants to share my knowledge and understanding with you.
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