Question

Find the time, in years in which Rs.$4000$ produce Rs.$630.50$ as compound interest $5$ per cent p.a. interest being compound annually.

Answer 1

We have,

$CI=Rs.630.50,P=Rs.4000,R=5\%,T=?$

We know that

$A=P+CI=P{(1+\frac{R}{100})}^T$

or, $4000+630.50=4000{(1+\frac{5}{100})}^T$

or, $4630.50=4000{(1+\frac{5}{100})}^T$

or, ${(1+\frac{1}{20})}^T=1.157625$

or, ${\left(1.05\right)}^T=1.157625$

or, ${\left(1.05\right)}^T=(1.05{)}^3$

or, $T=3years$