Page 206 - Start Up Mathematics_8 (Non CCE)

Solution: C.I. = ` 120, S.I. = ` 110, Time = 2 years

PR T¥ ¥ PR¥ ¥ 2
S.I. = fi 100 =
100 100
100 100¥
fi PR = = 5,000
2 Smart Tips

Ï Ê Ô R ˆ n ¸ To maximize the benefits of
Ô
C.I. = P Ì Á 1+ ˜ - 1 ˝ compound interest, follow the
Ó Ô Ë 100¯ ˛ Ô given advices:
Ï Ê Ô R ˆ 2 ¸ 1. The power of compound
Ô
fi 120 = P Ì Á 1+ ˜ - 1 ˝ interest is time—the more time
Ó Ô Ë 100¯ ˛ Ô you have, the more money you
will earn. So invest and save
Ï R 2 2R ¸
fi 120 = P 1+ + - 1 ˝ money as early as possible.
Ì
,
Ó 10 000 100 ˛ 2. If you borrow money and the
interest is compounded pay
Ê R 2 2 R ˆ
fi 120 = P Á Ë 10 000 100, + ˜ the money back as soon as
¯
possible.
PR 2 2 PR
fi 120 = +
10 000, 100
(PR ) R¥ 2 (PR )
fi 120 = +
10 ,000 100
Putting the value of PR = 5,000, we get
5 000, ¥ R 25 000,¥ 1
120 = + fi 120 = R + 100
10 000, 100 2
1
fi R = 120 100 = 20- fi R = 20 × 2 = 40
2
Putting the value of R in PR = 5,000, we get
5 000,
P × 40 = 5,000 fi P = = 125
40
Hence, the principal is ` 125 and the rate is 40% per annum.

EXERCISE 13.3

1. In how many years will ` 4,000 amount to ` 5,324 at the rate of 10% per annum compounded annually?
2. At what rate of compound interest will ` 1,250 amount to ` 1,800 in 2 years?
3. Anuradha invested a certain sum of money at the compound interest of 8% per annum compounded
annually. At the end of 2 years, she received an amount of ` 7,290. How much amount did Anuradha
invest?
1
4. If the amount after 1 years at the rate of 25% per annum compounded half-yearly is ` 10,935, find
the principal. 2
5. The difference between the compound interest and the simple interest on a certain principal for
1
2 years at the rate of 6 % per annum is ` 25. Find the principal.
4
6. A sum of ` 2,000 amounts to ` 2,163.20 in 2 years. Find the rate of interest if the interest is compounded
annually.

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