Question

A certain sum of money amounts to Rs. 23,400 in 3 years at 10% per annum simple interest. Find the amount of the same sum in 2 years and at 10% p.a. compound interest.

Answer 1

Let pricipal amount be p

,time is 3 years ,

rate is 10% per year and

amount =23400 .

then $p+\frac{p\times r\times t}{100}=amount.\Rightarrow p+\frac{p\times 10\times 3}{100}=23400.\Rightarrow \frac{13p}{10}=23400\Rightarrow p=18000$

Amount after 2 year , if interest is compounded will be $A=p(1+\frac{r}{100}{)}^t\Rightarrow A=18000(1+\frac{10}{100}{)}^{2}A=18000(\frac{11}{10}{)}^2\Rightarrow A=Rs.21780$