Question

Komal invested a sum of ₹5000 at 20% per annum compound interest, componded annually. If she received an amount of ₹7200 after n years, the value of n is:

• A. 2
• B. 1.4
• C. 2.5
• D. 3

Answer 1

Answer:

A. 2

Here's how to solve this compound interest problem:

1. Understand the Compound Interest Formula:

• $A = P (1 + R/100)^n$

  • A = Amount after n years

  • P = Principal (initial sum of money)

  • R = Rate of interest per annum

  • n = Number of years

2. Set up the equation:

• A = ₹7200

• P = ₹5000

• R = 20%

• n = ? (what we need to find)

• Substitute the values into the formula:

  • $7200 = 5000 (1 + 20/100)^n$

3. Solve for n:

• Divide both sides by 5000:

  • $7200 / 5000 = (1 + 1/5)^n$

  • $1.44 = (6/5)^n$

  • $1.44 = (1.2)^n$

4. Find the value of n by trial and error or by using logarithms (simpler trial and error in this case):

• $(1.2)^1 = 1.2$

• $(1.2)^2 = 1.44$

5. Conclusion:

• Therefore, n = 2

The value of n is 2.