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At what rate per cent compound interest, does a sum of money become 1.44 times of itself in 2 years ?
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At what rate per cent compound interest, does a sum of money become 1.44 times of itself in 2 years ?
Let Principal = Rs. yThen Amount= Rs 1.44y
n= 2 years
∴ Amount = `"P"( 1 + "r"/100 )^n`
⇒ 1.44y = `y( 1 + r/100)^2`
⇒ `[1.44y]/y = ( 1 + r/100)^2`
⇒ `36/25 = ( 1 + r/100)^2`
⇒ `( 6/5 )^2 = ( 1 + r/100)^2`
On comparing,
`6/5 = 1 + r/100`
On solving, we get
r = 20 %
Concept: Concept of Compound Interest - Inverse Formula
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