Question

In how many years will $\text{Rs.}6250$ amount to $\text{Rs.}7290$ at $8\%$ per annum, compounded annually?

Answer 1

Given:

$A=\text{Rs.}7290$

$P=\text{Rs.}6250$

$R=8\%$

By using the formula to calculate compound interest,

$\begin{array}{cc}A& =P{\left(1+\frac{R}{100}\right)}^n\\ 7290& =6250{\left(1+\frac{8}{100}\right)}^n\\ \frac{729}{625}& ={\left(1+\frac{2}{25}\right)}^n\\ {\left(\frac{27}{25}\right)}^2& ={\left(\frac{27}{25}\right)}^n\\ n& =2\end{array}$

So, in $2$ years $\text{Rs.}6250$ will amount to $\text{Rs.}7290$.