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A Sum of Money, Invested at Compound Interest, Amounts to Rs 16,500 in 1 Year and to Rs19,965 in 3 Years. Find the Rate per Cent and the Original Sum of Money Invested.

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Question

A sum of money, invested at compound interest, amounts to Rs. 16,500 in 1 year and to Rs. 19,965 in 3 years. Find the rate per cent and the original sum of money invested.

Sum
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Solution

Let sum of money be Rs P and rate of interest = r %
Money after 1 year = Rs. 16,500
Money after 3 years = Rs. 19,965

For 1 year
∴ `"A" = "P"( 1 + r/100 )^n`

⇒ 16,500 = P`( 1 + r/100 )^1`             ...(1)

For 3 years
∴  A = P`( 1 + r/100 )^n`
⇒ 19,965 = P`( 1 + r/100 )^3`             ...(2)

Divide eqn (2) by eqn (1)

`[19,965]/[ 16,500 ] = [P( 1 + r/100 )^3]/[P( 1 + r/100)^1]`

⇒ `121/100 = ( 1 + r/100 )^2`

⇒ `(11/10)^2 = ( 1 + r/100 )^2`

On comparing, we get

⇒ `11/10 = 1 + r/100 `

⇒ r = 10%

Put value of r in eqn(1)
16,500 = P`( 1 + 10/100)`

⇒ P = `[16,500 xx 10]/11` = Rs. 15,000.

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Concept of Compound Interest - When the Time is Not an Exact Number of Years and the Interest is Compounded Yearly
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Chapter 3: Compound Interest (Using Formula) - Exercise 3 (D) [Page 53]

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Selina Concise Mathematics [English] Class 9 ICSE
Chapter 3 Compound Interest (Using Formula)
Exercise 3 (D) | Q 5 | Page 53

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