Name: Depreciation Problem
Uploaded: 2019-07-19
Duration: 2 min
Description: Depreciation problems and solutions is set of solved questions for the straight line method, units of output method and other methods. Let's explore some pra...

Question

Determine the rate of interest at which a sum of money will become

\frac{216}{125}

times the original amount in

1 \frac{1}{2}

years, if the interest is compounded half-yearly.

Accepted Answer

Given: Let the principal amount be $R s . P$ and the rate of interest be $R %$ per annum. For the interest compounded half yearly.

Time $= \frac{3}{2}$ years $= 2 \times \frac{3}{2} = 3$ years

Rate of interest $(R %) = \frac{R}{2}$

amount at the end of $3$ years must become to $\frac{216 P}{125}$

$A = \frac{216 P}{125} A = P {(1 + \frac{R}{100})}^{n}$

Rate of interest $(R %) = \frac{R}{2}$

$\frac{216 P}{125} = P {(1 + \frac{R}{200})}^{3} \frac{216}{125} = {(1 + \frac{R}{200})}^{3} {(\frac{6}{5})}^{3} = {(1 + \frac{R}{200})}^{3} (\frac{6}{5}) = (1 + \frac{R}{200}) \frac{6}{5} - 1 = \frac{R}{200} \frac{(6 - 5)}{5} = \frac{R}{200} {(\frac{6}{5})}^{3} = {(1 + \frac{R}{200})}^{3} (\frac{6}{5}) = (1 + \frac{R}{200}) \frac{6}{5} - 1 = \frac{R}{200} \frac{(6 - 5)}{5} = \frac{R}{200} \frac{1}{5} = \frac{R}{200} R = \frac{200}{5} = 40 %$

Hence the rate of interest $(R) = 40 %$

Determine the rate of interest at which a sum of money will become $\frac{216}{125}$ times the original amount in $1 \frac{1}{2}$ years, if the interest is compounded half-yearly.

Important Questions on Compound Interest

Learn and Prepare for any exam you want !

Determine the rate of interest at which a sum of money will become 216125 times the original amount in 112 years, if the interest is compounded half-yearly.

Important Questions on Compound Interest

Learn and Prepare for any exam you want !

Determine the rate of interest at which a sum of money will become $\frac{216}{125}$ times the original amount in $1 \frac{1}{2}$ years, if the interest is compounded half-yearly.