Question

A person investing p at a certain rate of simpl interest after 1 2 and3 years it amounted to 1.5 p 2.5 p respectively what will it amount to at the end of 20 years

Answer 1

Answer: It will amount to 11p after 20 years.

Explanation:

Formula :

Simple interest = Principal x rate x Time              (i)

Amount = Principal + Interest

Amount = Principal +   Principal x rate x Time

Amount =  Principal (1+  rate x Time)                       (ii)

Given: Principal = p

After 1 year , amount = 1.5p

After 3 years , amount = 2.5p

From (ii)

$1.5p = p (1+r)\\\\\Rightarrow\ 1.5=1+r\\\\\Rightarrow\ 0.5= r\\\\\Rightarrow r= 0.5$

Amount after 20 years = p(1+ 0.5 x 20) = p(1+10)=11p

It will amount to 11p after 20 years.