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
19
Let the principal be .
T=8yrs
A=200
:.SI=A-P=200-=
Since R=(SI×100)/(P×T)
=(×)/(×8)
=/8
=12.5%
(ÆÑẞWĒR)
#Mærk ãß thē Bråìñlïêßt
Rëgārdß
Tèàm Káñçhâ
T=8yrs
A=200
:.SI=A-P=200-=
Since R=(SI×100)/(P×T)
=(×)/(×8)
=/8
=12.5%
(ÆÑẞWĒR)
#Mærk ãß thē Bråìñlïêßt
Rëgārdß
Tèàm Káñçhâ
Answered by
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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