Simple and Compound Interest Assignment:1
Que 1: What is the annual interest rate at which an investment of 3000 rs will grow to 3993 rs after 3 years, assuming the interest is compounded annually?
Cube root both sides⇒ ∛1000: ∛1331= 10:11
Annual interest rate= 10%
Que 2: What will be the compound interest earned on an investment of 10,000 rs at a rate of 4% per annum, compounded half-yearly, over a period of 2 years?
Solution: 4% per annum= 2% half yearly
10404⇒ 10404+208.**=10612.**
10612⇒ 10612+212.**= 10824.**
Que 3: If a certain amount of money grows to 10648 rs in 3 years and 9680 rs in 2 years with compound interest, what is the annual interest rate?
1210: 1331⇒ Difference or CI= 121
Que 4: What is the annual interest rate at which an investment of 2304 rs will grow to 2500 rs in 2 years with compound interest?
Square root both sides⇒ √2304: √2500= 48: 50
Interest rate= 200/48= 25/6= 4(1/6)%
Que 5: Assuming a compound interest rate of 4% per annum for the first year, 5% per annum for the second year, and 6% per annum for the third year, what will be the total compound interest earned on an investment of 10,000 rs for 3 years?
Solution: 10000⇒ 10000+400=10400
10920⇒ 10920+ 654.**=11574.**
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