Question 62

A certain amount which was loaned on simple interest doubled in 10 years Then the amount received is loaned on compound interest for another 2 years on the same rate What is the total rise in the amount after 12 years with the initial principal amount ?

Solution

The amount doubled in 10 years. So, the interest = principle.

So, rt/100 = 1

r = 10% pa

Now compound interest = ?

2P $$(1 + .1) ^ {2}$$ = 2P x 1.21 = 2.42P

Total rise is P to 2.42P = rise of 142%

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