23.8k views
4 votes
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
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories