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A sum of money increased by 56.25% in 2 years, when lent at a certain rate of
compound interest, interest being compounded annually. If the same sum is lent
at simple interest at the same rate of interest, in how many years would it
become 11 times itself?
Options
- 27
- 30
- 40
- 48
Answers
Given : A sum of money increased by 56.25% in 2 years, when lent at a certain rate of compound interest
the same sum is lent at simple interest at the same rate of interest,
To Find : in how many years would it become 11 times itself
Solution:
Sum deposited = P
Rate of interest = R
Time = n = 2 years
A = P + (56.25/100)P = 1.5625P
A = P(1 + R/100)ⁿ
=> 1.5625P = P ( 1 + R/100)²
=> 1.25 = 1 + R/100
=> R = 25
SI = P * R * n/100
A = 11P
SI = 11P - P = 10P
10P = P * 25 * n/100
=> n = 40
Hence 40 years
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