Peter invested a certain sum of money in a simple interest bond whose value grew to $400 at the end ...
Peter invested a certain sum of money in a simple interest bond whose value grew to $400 at the end of 3 years and to $ 600 at the end of another 2 years. What was the rate of interest in which he invested his sum?
Answer/Solution
100%
Steps/Work
Lets assume the Principal Amount (initial amount invested) to be P
rate of interest to beRand time as T. We need to find R
Now After a time of 3years the principal P amounts to $400 and after a time of 5years ( question says after another 5years so 3+2) P becomes $600.
Formulating the above data
Amount (A1) at end of 3years
A1= P(1 + 3R/100) = 400
Amount (A2) at end of 8years
A2 = P(1 + 5R/100) = 600
Dividing A2 by A1 we get
(1 + 5R/100)/(1 + 3R/100) = 6/8
after cross multiplication we are left with R =100
Option: A
rate of interest to beRand time as T. We need to find R
Now After a time of 3years the principal P amounts to $400 and after a time of 5years ( question says after another 5years so 3+2) P becomes $600.
Formulating the above data
Amount (A1) at end of 3years
A1= P(1 + 3R/100) = 400
Amount (A2) at end of 8years
A2 = P(1 + 5R/100) = 600
Dividing A2 by A1 we get
(1 + 5R/100)/(1 + 3R/100) = 6/8
after cross multiplication we are left with R =100
Option: A