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A certain sum is lent at a certain rate of compound interest. It grows to 1.44 times its value in 2Â years. If the same sum is lent at simple interest at the same rate, in how many years would it double itself ?
Let the invested money be "P" at a rate of R % in compound interest :
After two years the value becomes =$$P(1+R/100)^2$$ = 1.44 P
                  1 + R/100 = 1.2Â
                  R = 20 %.
If same amount of P is invested in simple interest, then value of money after 't' years = $$P\left(1+\frac{\ R\left(t\right)}{100}\right)$$ = 2(P)
                                 1 + R(t)/100 = 2Â
                                 R(t) = 100
Therefore, t = 100/R = 100/20 = 5 years.
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