A certain sum at simple interest doubles in 8 years .What is the rate of interest per annum ?
Answers
Answer:
Step-by-step explanation:
There are simple methods to count to number of years it will take to double your money using simple interest and compound interest.
For simple interest, the formula is : r=100/n , where r is the rate of interest and n is the number of years.
Examples for Simple Interest:
I want to double my principal amount in 8 years so at what simple interest rate should I invest my money?
Answer is r=100/n. Therefore r=100/8=12.5%. So if I invest in a scheme which gives me 12.5% simple interest I will be able to double my money in 8 years.
Someone is giving me 7% simple interest on my principle amount. In how many years I will be able to double my money?
Answer is n=100/r. Therefore n=100/7=14.28. So it will take 14.28 years to double my money at 7% simple interest rate.
For compound interest, the formula is r=72/n, where r is the rate of interest and n is the number of years.
Examples for Compound Interest:
I want to double my principal amount in 8 years so at what compound interest rate should I invest my money?
Answer is r=72/n. Therefore r=72/8=9%. So if I invest in a scheme which gives me 9% compound interest I will be able to double my money in 8 years.
Someone is giving me 7% compound interest on my principle amount. In how many years I will be able to double my money?
Answer is n=72/r. Therefore n=72/7=10.28. So it will take 10.28 years to double my money at 7% compound interest rate.
So simply remember 100 for simple interest and 72 for compound interest.