More solved problems on compound interest using formula are shown below. Show
1. The simple interest on a sum of money for 3 years at 6²/₃ % per annum is $ 6750. What will be the compound interest on the same sum at the same rate for the same period, compounded annually?Solution: Given, SI = $ 6750, R = \(\frac{20}{3}\)% p.a. and T = 3 years. sum = 100 × SI / R × T = $ (100 × 6750 × ³/₂₀ × 1/3 ) = $ 33750. Now, P = $ 33750, R = \(\frac{20}{3}\)% p.a. and T = 3 years. Therefore, amount after 3 years = $ {33750 × (1 + (20/3 × 100)}³ [using A = P (1 + R/100)ᵀ] = $ (33750 × 16/15 × 16/15 × 16/15) = $ 40960. Thus, amount = $ 40960. Hence, compound interest = $ (40960 - 33750) = $ 7210. 2. The difference between the compound interest, compounded annually and the simple interest on a certain sum for 2 years at 6% per annum is $ 18. Find the sum.Solution: Let the sum be $ 100. Then, SI = $ (100 × 6 × 2/100) = $ 12 and compound interest = $ {100 × (1 + 6/100)² - 100} = $ {(100 × 53/50 × 53/50) - 100} = $ (2809/25 - 100) = $ 309/25 Therefore, (CI) - (SI) = $ (309/25 – 100) = $ 9/25 If the difference between the CI and SI is $ 9/25, then the sum = $ 100. If the difference between the CI and SI is $ 18, then the sum = $ (100 × 25/9 × 18 ) = $ 5000. Hence, the required sum is $ 5000. Alternative method Let the sum be $ P. Then, SI = $ (P × 6/100 × 2) = $ 3P/25 And, CI = $ {P × (1 + 6/100)² - P} = $ {(P × 53/50 × 53/50) - P} = $ (\(\frac{2809}{2500}\)P - P) = $ (309P/2500) (CI) - (SI) = $ (309P/2500 – 3P/25) = $ (9P/2500) Therefore, 9P/2500 = 18 ⇔ P = 2500 × 18/9 ⇔ P = 5000. Hence, the required sum is $ 5000. 3. A certain sum amounts to $ 72900 in 2 years at 8% per annum compound interest, compounded annually. Find the sum.Solution: Let the sum be $ 100. Then, amount = $ {100 × (1 + 8/100)²} = $ (100 × 27/25 × 27/25) = $ (2916/25) If the amount is $ 2916/25 then the sum = $ 100. If the amount is $ 72900 then the sum = $ (100 × 25/2916 × 72900) = $ 62500. Hence, the required sum is $ 62500. Alternative method Let the sum be $ P. Then, amount = $ {P × (1 + 8/100)²} = $ {P × 27/25 × 27/25} = $ (729P/625) Therefore, 729P/625 = 72900 ⇔ P = (72900 × 625)/729 ⇔ P = 62500. Hence, the required sum is $ 62500. 4. In this question the formula is when the interest is compounded annually to solve this problem on compound interest. 4. At what rate per cent per annum will Ron lends a sum of $2000 to Ben. Ben returned after 2 years $2205, compounded annually?Solution: Let the required rate be R% per annum. Here, A = $ 2205, P = $ 2000 and n = 2 years. Using the formula A = P(1 + R/100)ⁿ, 2205 = 2000 × ( 1 + R/100)² ⇒ (1 + R/100)² = 2205/2000 = 441/400 = (21/20)² ⇒ ( 1 + R/100) = 21/20 ⇒ R/100 = (21/20 – 1) = 1/20 ⇒ R = (100 × 1/20) = 5 Hence, the required rate of interest is 5% per annum. 5. A man deposited $1000 in a bank. In return he got $1331. Bank gave interest 10% per annum. How long did he kept the money in the bank?Solution: Let the required time be n years. Then, amount = $ {1000 × (1 + 10/100)ⁿ} = $ {1000 × (11/10)ⁿ} Therefore, 1000 × (11/10)ⁿ = 1331 [since, amount = $ 1331 (given)] ⇒ (11/10)ⁿ = 1331/1000 = 11 × 11 × 11/ 10 × 10 × 10 = (11/10)³ ⇒ (11/10)ⁿ = (11/10)³ ⇒ n = 3. Thus, n = 3. Hence, the required time is 3 years. ● Compound Interest Compound Interest Compound Interest with Growing Principal Compound Interest with Periodic Deductions Compound Interest by Using Formula Compound Interest when Interest is Compounded Yearly Compound Interest when Interest is Compounded Half-Yearly Compound Interest when Interest is Compounded Quarterly Problems on Compound Interest Variable Rate of Compound Interest Difference of Compound Interest and Simple Interest Practice Test on Compound Interest Uniform Rate of Growth Uniform Rate of Depreciation Uniform Rate of Growth and Depreciation ● Compound Interest - Worksheet Worksheet on Compound Interest Worksheet on Compound Interest when Interest is Compounded Half-Yearly Worksheet on Compound Interest with Growing Principal Worksheet on Compound Interest with Periodic Deductions Worksheet on Variable Rate of Compound Interest Worksheet on Difference of Compound Interest and Simple Interest Worksheet on Uniform Rate of Growth Worksheet on Uniform Rate of Depreciation Worksheet on Uniform Rate of Growth and Depreciation Didn't find what you were looking for? Or want to know more information about Math Only Math. Use this Google Search to find what you need. At what rate percent per year will a sum of ₱ 2000 amount to ₱ 2205 in 2 years compounded annually?Hence, the required rate of interest is 5%.
At what interest rate in percent per year will a PHP 2000 become PHP 2205 in 2 years compounded annually?⟹r=0. 05=5%
At what rate per annum will Rs 2000 becomes Rs 2205 in 2 years compounded annually?∴ Rate =5% half yearly or 10% p.a. Q. A sum amounts to Rs. 756.25 at 10% per annum in 2 years, compounded annually.
At what rate of compound interest per annum will a sum of 2000 become 2332.80 in 2 years interest compounded annually?This is Expert Verified Answer
Given, Principal = 2000, A = 2332.80, Time n = 2 years. ⇒ r = 8. Therefore, R = 8%.
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