Economy, asked by vive3066, 1 year ago

A bank advertises that you can double the money if you invest it with them for 8 years, what is the rate of interest offered by them?4

Answers

Answered by indusinghkancha
19
Let the principal be .
T=8yrs
A=200
:.SI=A-P=200-=
Since R=(SI×100)/(P×T)
=(×)/(×8)
=/8
=12.5%
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Tèàm Káñçhâ
Answered by topanswers
6

First Scenario:

Let us assume bank follows the process of Simple Interest.

Simple Interest = Principal * Interest Rate * Number of years of deposit / 100

Let us assume Principal amount is Rs.1000

To make it double, interest earned has to be Rs.1000

By using above formula,

Number of years of deposit =  (100 * 1000) / (1000 * 8) = 12.5 years.

Second scenario - Using compound interest.

Most banks calculate interests by compounding them either monthly/ quarterly/half-yearly or annually.

When amount doubles, to calculate the number of years of deposit, we may use 70/interest rate(r) rule.

70/8 = 8.75% approximately.

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