At what rate percent compound interest, does a sum of money becomes 1.44 times of itself in 2 yrs? 

Asked by pratyakshajha.12 | 8th May, 2015, 07:46: PM

Expert Answer:

L e t space P space b e space t h e space p r i n c i p a l space s u m space o f space m o n e y space a n d space l e t space apostrophe r apostrophe space b e space t h e space r a t e space o f space i n t e r e s t space c o m p o u n d e d space a n n u a l l y. G i v e n space t h a t space t h e space a m o u n t space b e c o m e s space 1.44 space t i m e s space t h e space p r i n c i p a l space s u m space a f t e r space 2 space y e a r s. rightwards double arrow A equals 1.44 cross times P... left parenthesis 1 right parenthesis A l s o space f r o m space t h e space c o m p o u n d space i n t e r e s t space f o r m u l a comma space w e space h a v e comma A equals P cross times open parentheses 1 plus r over 100 close parentheses squared.... left parenthesis 2 right parenthesis F r o m space e q u a t i o n s space left parenthesis 1 right parenthesis space a n d space left parenthesis 2 right parenthesis comma space w e space h a v e comma 1.44 cross times P equals P cross times open parentheses 1 plus r over 100 close parentheses squared rightwards double arrow 1.44 equals open parentheses 1 plus r over 100 close parentheses squared rightwards double arrow square root of 1.44 end root equals open parentheses 1 plus r over 100 close parentheses rightwards double arrow 1.2 equals open parentheses 1 plus r over 100 close parentheses rightwards double arrow 1 plus 2 over 10 equals open parentheses 1 plus r over 100 close parentheses rightwards double arrow 2 over 10 equals r over 100 rightwards double arrow 20 over 100 equals r over 100 rightwards double arrow r equals 20 %

Answered by Vimala Ramamurthy | 9th May, 2015, 09:23: AM