A sum of ₹2400 becomes ₹3600 in 6 years at a certain rate of compound interest (compounded annually). What will be the amount after 12 years at the same rate of interest?
Answer & explanation
Correct answer: option 3
The Formula that we used here is -
Amount = P$(1 \;+\; \frac{R}{100})^t$
3600 = 2400 [ 1 + \(\frac{R}{100}\)]6
\(\frac{3}{2}\) = [ 1 + \(\frac{R}{100}\)]6
Now,
For 12 years ,
A = 2400 [ 1 + \(\frac{R}{100}\)]¹²
= 2400 [( 1 + \(\frac{R}{100}\) )6 ]²
= 2400 [ \(\frac{3}{2}\) ]²
= 2400 × \(\frac{3}{2}\) × \(\frac{3}{2}\)
= Rs. 5400