Question

By using the formula, find the amount and compound interest on:

In how many years will Rs 1800 amount to Rs 2178 at $10\%$ per annum when compounded annually ?

Answer 1

$\text{Principal (P) = Rs. 1800}\text{Amount (A) = Rs. 2178}\text{Rate (r)}=10\%p.a.\text{Let n be the number of years. We know that}A=P{(1+\frac{r}{100})}^n\Rightarrow {(1+\frac{r}{100})}^n=\frac{A}{P}\Rightarrow {(1+\frac{10}{100})}^n=\frac{2178}{1800}\Rightarrow {\left(\frac{11}{10}\right)}^n=\frac{121}{100}={\left(\frac{11}{10}\right)}^n\text{(Dividing by 18)}\therefore \text{While comparing, we get}n=2\therefore \text{Period = 2 years Ans.}$