Question:
In how much time will a sum of Rs 1600 amount to Rs 1852.20 at 5% per annum compound interest?
Solution:
$\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$1852.20=1600\left(1+\frac{5}{100}\right)^{\mathrm{n}}$
$\frac{1852.20}{1600}=(1.05)^{\mathrm{n}}$
$(1.05)^{\mathrm{n}}=1.157625$
$(1.05)^{\mathrm{n}}=(1.05)^{3}$
On comparing both the sides, we get:
n = 3
Thus, the required time is three years.