Question

LO

Answer 1

Answer: Rs. 1,100

Explanation:

Compound interest calculation at three years:

2,200 = Amount * (1 + r) ³

Compound interest at six years.

4,400 = Amount * (1 + r) ⁶

Divide them to eliminate variables:

4,400/ 2,200 = (Amount * (1 + r) ⁶) / (Amount * (1 + r) ³)

2 = (Amount * (1 + r) ³)

If (Amount * (1 + r) ³ is 2 then Amount at 3 years is:

2,200 = Amount * 2

Amount = 2,200 / 2

= Rs. 1,100