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Problem 1 :
Find the simple interest for 2 years on P2000 at 6% per year.
Problem 2 :
In simple interest, a sum of money doubles itself in 10 years. Find the number of years it will take to triple itself.
Problem 3 :
In simple interest, a sum of money amounts to P6200 in 2 years and P7400 in 3 years. Find the principal.
Problem 4 :
P800 is invested in C.I where the rate of interest is 20% per year. If interest is compounded half yearly, what will be
the accumulated value and C.I after 2 years?
Problem 5 :
A sum of money placed at compound interest doubles itself in 3 years. In how many years will it amount to four
times itself?
Problem 6 :
The difference between the compound interest and simple interest on a certain investment at 10% per year for 2
years is P631. Find the value of the investment.
Problem 7 :
The difference between the compound interest and simple interest on a certain principal is at 10% per year for 3
years is P31. Find the principal.
Problem 8 :
The compound interest and simple interest on a certain sum for 2 years is P 1230 and P 1200 respectively. The rate
of interest is same for both compound interest and simple interest and it is compounded annually. What is the
principal?
Answers
1. Answer :
I = Pnr/100
Here, P = 2000, n = 2, r = 6.
I = (2000 x 2 x 6)/100
I = 20 x 2 x 6
I = 240
2. Answer :
From the above calculation, P is the interest for the first 10 years.
3. Answer :
From these two information, we can get the interest earned in the 3rd year as given
below.
4. Answer :
The formula to find accumulated value in C.I is
A = P(1 + r/n)nt
Here,
P = 800
r = 20% = 0.2
n=2
t=2
A = 800(1 + 0.1)4
= 800(1.1)4
= 800 x 1.4641
= $1171.28
C.I = A - P
= 1171.28 - 800
= $371.28
5. Answer :
Since the investment is in C.I, the principal in the 4th year will be 2P.
6. Answer :
The difference between compound interest and simple interest for 2 years is 631.
Then we have,
P(R/100)2 = 631
P(10/100)2 = 631
P(1/10)2 = 631
P(1/100) = 631
P = 63100
7. Answer :
The difference between compound interest and simple interest for three years is 31.
Then we have,
P(R/100)2(R/100 + 3) = 31
P(10/100)2(10/100 + 3) = 31
P(1/10)2(1/10 + 3) = 31
P(1/100)(31/100) = 31
P(31/1000) = 31
P = 1000
8. Answer :
To find the principal, we need rate of interest. So, let us find the rate of interest
first.
Step 1 :
Simple interest for two years is $1200. So interest per year in simple interest is
$600.
So, C.I for 1st year is $600 and for 2nd year is $630.
(Since it is compounded annually, S.I and C.I for 1st year would be same)
Step 2 :
When we compare the C.I for 1st year and 2nd year, it is clear that the interest
earned in 2nd year is 30 more than the first year.
Because, in C.I, interest $600 earned in 1st year earned this $30 in 2nd year.
30 = (600 x R x 1)/100
30 = 6R
5=R
So, R = 5%
Step 3 :
The difference between compound interest and simple interest for two years is
= 1230 - 1200
= 30
Then we have,
P(R/100)2 = 30
Substitute R = 5.
P(5/100)2 = 30
P(1/20)2 = 30
P(1/400) = 30
P = 12000