Question

A sum of rs 2500 becomes rs 8100 in 2 years at a certain rate of compound interest. What will be the sum (in rs) after 4 years?

Answer 1

Let r be the rate of compound interest .

It is given that, Rs. 2500 has become Rs. 8100 after 2 years.  

Hence formula for compound interest is as given below

S = p(1 + r/100)^n

S = Sum after n number of cycles. (Here each cycle is a year)

p = Principle Invested

r = Rate of interest.  

8100 = 2500(1 + r/100)^2

81/25 = (1 + r/100)^2

Applying Square root on both sides we get

9/5 = 1 + r/100

r/100 = 4/5

r = 80.

Rate of interest is 80%.

For  calculating sum after 4 years, we need following data

P = 2500 r = 80 n = 4

S = 2500(1 + 80/100)^4

  = 2500 (9/5)^4

  = 26244.

The sum after 4 years will be Rs. 26244.

Answer 2

A sum of rs 2500 becomes rs 8100 in 2 years at a certain rate of compound interest. What will be the sum (in rs) after 4 years?

in 2 years rs 2500 become rs 8100

so amount increased to 8100/2500

= 81/25 times

after 4 years mean further two years so in next 2 years also amount will increase to same ratio at amount of rs 8100

so amount will be after further two years (total 4 years)

= 8100 × 81/25

=rs 26244