Question

A sum of money becomes 8/5 of itself in 5 years at a certain rate of simple intrest. Find the rate of intrest

Answer 1

Answer:

8/ 5 × 100

= 160 %

Therefore 1.1 × 1.1 × 1.1 × 1.1 × 1.1

= 1.61051

1.1 means an annual increase of 10 % compounded. But 10 % is slightly too much. So, use Interpolation to get to the correct answer. However, I'm not interested in the calculator, so I will settle for 9.9 % compounded annually.