Question

A sum of money at simple rate off interest i-1 double in 5 years at another simple rate of interest i-2 becomes 3 times in 12 years then the two rates of interest i-1 and i-2 are

Answer 1

Answer:

The formula for compound interest is A = P (1 + i)^n

where A is the amount after n periods at interest i

2 P = P (1 + i1)^5

2 = (1 + i1^^5

log 2 = 5 log (1 + i1)

log (1 + i1) = log 2 / 5 = .060

1 + i1 = 10^.06 = 1.148

i1 = .148 or 14.8 %

Check 1.148^5 = 2

Do the same calculation for i2