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11. How much time will it take for ₹5000

5618 at 6% per annum
annually?
to become
compounded

User Sarartur
by
7.4k points

1 Answer

7 votes

Answer:

2.31 Years

Explanation:

To calculate the time it will take for ₹5000 to grow to ₹5618 with a 6% annual interest rate when compounded annually, we can use the following formula:

A = P(1 + r/n)^(nt)

Where:

A = the final amount (₹5618)

P = the principal amount (₹5000)

r = the annual interest rate (6% or 0.06)

n = the number of times the interest is compounded per year (1, since it's compounded annually)

t = the time period in years

Plugging in the values, we get:

5618 = 5000(1 + 0.06/1)^(1t)

Simplifying:

1.1236 = 1.06^t

Taking the natural logarithm of both sides:

ln(1.1236) = ln(1.06^t)

Using the power rule of logarithms:

ln(1.1236) = t ln(1.06)

Solving for t:

t = ln(1.1236) / ln(1.06)

t ≈ 2.31 years

Therefore, it will take approximately 2.31 years for ₹5000 to grow to ₹5618 at a 6% annual interest rate when compounded annually.

User Yushin
by
7.6k points

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