Where, A = amount

P = Principal

r = rate in percent

n = time in years.

1) At what rate percent P.a , compound interest will $ 10,000 amount to $ 13,310 in three years?

Here, P = $ 10,000 ; A = $ 13,310 ; n = 3 years

A = P ( 1 + r)

13,310 = 10,000( 1 + r )

13,310/10,000 = ( 1 + r )

1331/1000 = ( 1 + r)

( 11/10)

11/10 = 1 + r

11/10 – 1 = r

( 11 – 10)/10 = r

1/10 = r

As rate is in percent so, r = (1/10) x 100

Rate = 10 % P.a.

2) At what rate percent compound interest P.a. will $640 amount to $ 774.40 in 2 years ?

Here, P = $ 640 ; A = $ 774.40 ; n = 2 years

A = P ( 1 + r)

774.40 = 640 ( 1 + r )

774.40 /640 = ( 1 + r )

77440 /64000 = ( 1 + r)

( 88/80)

(11/10)

11/10 = 1 + r

11/10 – 1 = r

( 11 – 10)/10 = r

1/10 = r

As rate is in percent so, r = (1/10) x 100

Rate = 10 % P.a.

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