A sum amounts to 21,600 in 8 years at 10% per annum simple interest. In what time will this sum double itself at the same rate of interest?
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Simple interest = (Principal × Time × Rate of interest)/100
⇒ 21600 = (Principal × 10 × 8)/100
⇒ Principal = Rs. 27,000
Compound interest = [Principal (1 + Rate of interest/100)n] - Principal
⇒ Compound interest = [27,000 (1 + 8/100)2] - 27,000
⇒ Compound interest = Rs. 4492.8
∴ Compound interest on Rs. 27,000 for 2 years @ 8%p.a. is Rs. 4492.8
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