Aman invests Rs in a bank at a certain rate of interest, compounded annually. If the ratio of the value of the investment after years to the value of the investment after years is , then the minimum number of years required for the value of the investment to exceed Rs is
Aman invests Rs in a bank at a certain rate of interest, compounded annually. If the ratio of the value of the investment after years to the value of the investment after years is , then the minimum number of years required for the value of the investment to exceed Rs is
Entered answer:
Solution
Formula for Compound Interest:
where:
final amount
principal amount (Rs 4000)
rate of interest (in decimals) per year (unknown)
number of years
Amount after 3 years:
Amount after 5 years:
Given ratio:
When dividing powers with the same base, we subtract the exponents.
Taking the positive square root:
Hence,
We need:
In the on-screen calculator, keep multiplying by itself, in the 9th time, you'll see it cross . Since we want the minimum number of years, we stop as soon as it crosses 5.
Hence, we need at least years.
To check (for more clarity):
After 8 years:
After 9 years: