Neeta wants to invest her money in asaving plan that will double her sum in9 years. Find the % rate per annum onthis savings plan if it pays compoundinterest.(A) 5(B) 9(C) 6(D) 7
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Given :- Neeta wants to invest her money in a saving plan that will double her sum in 9 years. Find the % rate per annum on this savings plan if it pays compound interest.
(A) 5 (B) 8 (C) 6 (D) 7
Solution :-
- Let Principal = P
- Amount = 2P (Double.)
- Time = 9 years.
- Rate = Let R% per annum compounded annually.
we know that, when rate is compounded annually,
- Amount = Principal * [ 1 + (Rate/100)]^(Time)
Putting values we get :-
→ 2P = P[ 1 + R/100 ]⁹
→ 2 = [1 + (R/100)]⁹
→ 2^(1/9) = 1 + (R/100)
→ (R/100) = 2^(1/9) - 1
→ (R/100) = 0.08
→ R = 0.08 * 100
→ R = 8% . (Ans.)
Hence, Rate of interest is 8% per annum compounded annually.
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