Question

The price of a piece of land increases 8% annually.If the land costs Mr. Chopra rs 70,000 three years ago,at what price to the nearest hundred can he sell the land now?

Answer 1

Answer :

Price of land 3 year ago P = Rs 70,000

Rate on increase r = 8%

And Time t = 3 years ( as we want to find price of land for now )

As price of land increase annually , SO we use formula for compound interest , As :

Amount = P ${\left(1+\frac{r}{100}\right)}^t$

SO ,

Amount = 70000 ${\left(1+\frac{8}{100}\right)}^3=70000{\left(\frac{108}{100}\right)}^3=70000{\left(\frac{27}{25}\right)}^3=\frac{70000\times 27\times 27\times 27}{25\times 25\times 25}=\frac{1377810000}{15625}$ = 88179.84

So , Price of land now = Rs. 88179.84

So nearest hundred = 88200

So Mr. Chopra can sell the land at it's nearest hundred at Rs . 88200 ( Ans )