1. Compound Interest CI = 210, Rate R = 10, Time T = 2 years, find P (Interest Compounded Annually)
Solution:
Compound Interest `CI=210`
Rate of interest `R=10%`
Time `T=2` year
Find `P,` (Interest Compounded Annually)
`A=P+I`
`:.A=1000+210`
`:.A=1210`
We know that
`A=P*(1+R/(100n))^(nT)`
`:.P=A/(1+R/(100n))^(nT)`
`:.P=1210/(1+10/(100xx1))^(1xx2)`
`:.P=1210/(1+0.1)^(2)`
`:.P=1210/(1.21)`
`:.P=1000`
2. Compound Interest CI = 1050, Rate R = 10, Time T = 2 years, find P (Interest Compounded Annually)
Solution:
Compound Interest `CI=1050`
Rate of interest `R=10%`
Time `T=2` year
Find `P,` (Interest Compounded Annually)
`A=P+I`
`:.A=5000+1050`
`:.A=6050`
We know that
`A=P*(1+R/(100n))^(nT)`
`:.P=A/(1+R/(100n))^(nT)`
`:.P=6050/(1+10/(100xx1))^(1xx2)`
`:.P=6050/(1+0.1)^(2)`
`:.P=6050/(1.21)`
`:.P=5000`
3. Compound Interest CI = 3640, Rate R = 20, Time T = 3 years, find P (Interest Compounded Annually)
Solution:
Compound Interest `CI=3640`
Rate of interest `R=20%`
Time `T=3` year
Find `P,` (Interest Compounded Annually)
`A=P+I`
`:.A=5000+3640`
`:.A=8640`
We know that
`A=P*(1+R/(100n))^(nT)`
`:.P=A/(1+R/(100n))^(nT)`
`:.P=8640/(1+20/(100xx1))^(1xx3)`
`:.P=8640/(1+0.2)^(3)`
`:.P=8640/(1.728)`
`:.P=5000`
This material is intended as a summary. Use your textbook for detail explanation.
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