1. Compound Interest CI = 210, Principal P = 1000, Time T = 2 years, find R (Interest Compounded Annually)
Solution:
Compound Interest `CI=210`
Principal `P=1000`
Time `T=2` year
Find `R,` (Interest Compounded Annually)
`A=P+I`
`:.A=1000+210`
`:.A=1210`
We know that
`A=P*(1+R/(100n))^(nT)`
`:.A/P=(1+R/(100n))^(nT)`
`:.(A/P)^(1/(nT))=1+R/(100n)`
`:.(A/P)^(1/(nT))-1=R/(100n)`
`:.R=100n*[(A/P)^(1/(nT))-1]`
`:.R=100xx1xx[(1210/1000)^(1/(1xx2))-1]`
`:.R=100xx[(1.21)^(1/(2))-1]`
`:.R=100xx[1.1-1]`
`:.R=100xx[0.1]`
`:.R=10`
2. Compound Interest CI = 1050, Principal P = 5000, Time T = 2 years, find R (Interest Compounded Annually)
Solution:
Compound Interest `CI=1050`
Principal `P=5000`
Time `T=2` year
Find `R,` (Interest Compounded Annually)
`A=P+I`
`:.A=5000+1050`
`:.A=6050`
We know that
`A=P*(1+R/(100n))^(nT)`
`:.A/P=(1+R/(100n))^(nT)`
`:.(A/P)^(1/(nT))=1+R/(100n)`
`:.(A/P)^(1/(nT))-1=R/(100n)`
`:.R=100n*[(A/P)^(1/(nT))-1]`
`:.R=100xx1xx[(6050/5000)^(1/(1xx2))-1]`
`:.R=100xx[(1.21)^(1/(2))-1]`
`:.R=100xx[1.1-1]`
`:.R=100xx[0.1]`
`:.R=10`
3. Compound Interest CI = 3640, Principal P = 5000, Time T = 3 years, find R (Interest Compounded Annually)
Solution:
Compound Interest `CI=3640`
Principal `P=5000`
Time `T=3` year
Find `R,` (Interest Compounded Annually)
`A=P+I`
`:.A=5000+3640`
`:.A=8640`
We know that
`A=P*(1+R/(100n))^(nT)`
`:.A/P=(1+R/(100n))^(nT)`
`:.(A/P)^(1/(nT))=1+R/(100n)`
`:.(A/P)^(1/(nT))-1=R/(100n)`
`:.R=100n*[(A/P)^(1/(nT))-1]`
`:.R=100xx1xx[(8640/5000)^(1/(1xx3))-1]`
`:.R=100xx[(1.728)^(1/(3))-1]`
`:.R=100xx[1.2-1]`
`:.R=100xx[0.2]`
`:.R=20`
This material is intended as a summary. Use your textbook for detail explanation.
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