Question

In what time will Rs 2700 yield the same interest at 4% per annum as rs 2250 in 4 years at 3% per annum

Answer 1

We know that

compound interest = CI = P((1+i)^n - 1)

P = Principal Amount

i = Rate of interest Per Annum

n = Time

P = 2250 ; n = 4 ; i = 3%

CI = 2250(1 + 4/100)^4 - 2250

= 2250(1 + 0.04)^4 - 2250

=2250(1.04)^4 - 2250

=2250 (1.1698) - 2250

=2632 - 2250

=382...

In what time will Rs 2700 yield the same interest at 4% per annum as rs 2250 in 4 years at 3% per annum

So P =2700 , i = 4% , n= ? , CI = 382

382 = 2700(1 + 4/100)^n - 2700

2700 + 382 = 2700 ( 1 + 0.04)^n

3082/2700 = (1 .04)^n

1.141 = (1.04)^n

(1.04)^3 = (1.04)^n

equate powers

n = 3 ; is the time taken