Question

If a certain principal amounts to $Rs.49,680$ at $5.2\%$ per annum over $2$ years how much will it amount to in $3$ years at the same rate of simple interest?

Answer 1

We have the formula for Amount in simple interest,

$A=P(1+rt)$

Given, $A=49680$, $t=2$ $r=5.2$

$\therefore 49680=P(1+2(0.052\left)\right)$

$49680=P(1+0.104)=P\left(1.104\right)$

$P=\frac{49680}{1.104}=45000$

Principal amount is Rs. $45000$

Amount in $3$ years is,

$A=P(1+rt)=45000(1+0.052(3\left)\right)=Rs.52020$