Question 70

In how many years will the interest on a certain sum of money at 5% p.a. be three-eights of itself? (Express your answer in years and months)

Solution

$$Interest = \frac{principal\ amount\ \times\ \ rate\ of\ interest\ \times\ time}{100}$$

$$\frac{3}{8}\times principal\ amount\ =\frac{principal\ amount\ \times5\times time}{100}$$

$$\frac{3}{8}\ =\frac{time}{20}$$

$$\frac{3}{2}\ =\frac{time}{5}$$

$$1.5 =\frac{time}{5}$$

time = 7.5 years

= 7 years 6 months (1 years =12 months, then 0.5 year = 6 months)

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