Question

In how many years will Rs. 6250 amount to Rs. 7290 at 8% per annum, compounded annually?

Answer 1

Let time = n years 

P = Rs.6250 

A = Rs.7290 

R = 8% per annum 

Now, 

Amount (A) = P (1 + R/100)ⁿ [Where, A = Amount with compound interest 

P = Present value 

R = Annual interest rate 

n = Time in years] 

∴ A = P (1 + R/100)ⁿ 

⇒ 7290 = 6250 (1 + 8/100)n 

⇒ (1 + 2/25)ⁿ = 7290/6250 

⇒ (27/25)ⁿ = 729/625 

⇒ (27/25)ⁿ = (27/25)² 

⇒ n = 2 

∴ Time = 2 years.