Using the ready reckoner, find the period of interest for an amount equal to Rs 16,939.2, when the principal is Rs 12000 at 9% p.a.
Answer
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Hint: Find the compound interest using the amount and principal for R = 9%. Then find the compound interest for Re1. By using the ready reckoner table find the value corresponding to compound interest at 9%.
Complete step-by-step answer: Ready Reckoner is a pre-calculated table of interest for different amounts and internal rates. Acquired Interest per Rupee, compounded yearly,
Years
9%
1
0.09
2
0.1881
3
0.2950
4
0.4116
5
0.5386
From the question, we have been given the Amount, principal and rate of interest.
Amount, A = 16939.2 Principal, P = Rs 12000 Rate of interest, r = 9% First we need to find the compound interest. Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words interest on interest. \[\Rightarrow \]Compound interest = Amount – Principal = A – P = 16939.2 – 12000 = 4939.2 Rupees. Thus we have Rs. 4939.2 as compound interest for the principal of Rs. 12000 at 9%. Now we need to find the compound interest for Re.1. For Rs 12000, the compound interest is Rs 4939.2. Therefore, for Principal Re.1, the compound interest \[=\dfrac{4939.2}{12000}=0.4116\] Now from the ready reckoner, find the year corresponding to the compound interest 0.4116. From the table you will get the value as 4. Therefore, the period of interest, n = 4.
Note: The ready reckoner table is available for different rates of interest. But for this problem on the value corresponding to the rate of interest 9% is required. The ready reckoner table can be used to facilitate simple calculations, especially for applying the rates of discount, interest, charging etc.
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