Question:
How can we find time period in compound interest?
Answer:
The formula of compound interest is
Amount A = P(1 + R/100)n
and CI = A - P
Where P is the principle, R is the rate percent per annum and n is the time in years.
So, when P, R and amount is given, we can calculate the time period.
Ex: At what time will Rs. 1000 become Rs. 1331 at 10% per annum compounded
annually?
Solu: Given, P = 1000, A = 1331, R = 10, n = ?
Now, 1331 = 1000(1 + 10/100)n
=> 1331/1000 = (1 + 1/10)n
=> 1331/1000 = (11/10)n
=> (11/10)3 = (11/10)n
=> equating the power, we get
=> n = 3
So, the time is 3 years.
Hence, in this way, we can calculate the time period of compound interest.
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