Supriya's received an offer from a local bank for investment scheme. The money as per the scheme will double in 5 years. What is the rate of interest?
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Answer:
By simple interest it would be 20%
and by compound interest it would be
Step-by-step explanation:
By Simple interest formula
Total Amount = P + PxRxT ÷ 100..................(2)
where, P is Principal amount
R is Rate of interest and T is time period
so according to the given condition,
Total Amount =2xP...............(2)
Therefore from eq. (1) & eq.(2)
2P = P+ PxRxT ÷100
2P - P = PxRxT ÷100
Since time is of five years,
P = PxRx5 ÷ 100
P÷P = 5R ÷100
5R ÷ 100 = 1
5R = 100
R= 100÷5
R = 20%
Therefore the interest is 20%. ✓✓
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