Paper 4: Fundamentals of Business Mathematics & Statistic

1.8 I FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS

Arithmetic

Example 15 : What principal will produce ` 50.50 interest in 2 years at 5% p.a. simple interest.

S.I. = 50.50, n = 2, i = 0.05, P =?

S.I. = P. i.n. or, 50.50 = P x 0.05 x 2 = P x 0.

or, P=50.0.10^50 =^505

∴ Reqd. principal = ` 505.

Problems to find rate % :

Example 16 : A sum of ` 1200 was lent out for 2 years at S. I. The lender got ` 1536 in all. Find the rate of interest

p.a.

P = 1200, A = 1536, n = 2, i =?

A = P (1 + ni) or 1536 = 1200 (1 +2i) = 1200 + 2400 i

or, 2400i = 1536 – 1200 = 336 or, i= 2400336 =0.

∴ Reqd. rate = 0.14 x 100 = 14%.

Example 17 : At what rate percent will a sum, become double of itself in 521 years at simple interest?

A = 2P, P = Principal, n 5=^12 , i =?

A = P (1 + ni) or, 2P = P (1+^112 i)

or, 2 = 1+^112 i or,i= 112

or, n= 112 ×100 18.18= (approx); Reqd. rate = 18.18%.

Problems to find time :

Example 18 : In how many years will a sum be double of itself at 10% p.a. simple interest.

A = 2P, P = Principal, i= 10010 = 0.10, n=?

A = P (1 + ni) or, 2P = P [1 + n(.10)] or, 2 = 1 + n (.10)

or, n (.10) = 1 or, n=.10^1 =^10

∴ Reqd. time = 10 years.

Example 19 : In what time ` 5000 will yield ` 1100 @^521 %?

P = 5000, S.I. = 1100,

(^512)
i= 100 =0.055, n =?
S.I.= P. ni or, 1100 = 5000 × n × (0.055) = 275 n
or, n=^1100275 =4. ∴ Reqd. time = 4 years.