Find the sum of money when increases 1/10 of itself every year amount to Rs. 600 in 5 years.

Question

Find the sum of money when increases 1/10 of itself every year amount to Rs. 600 in 5 years. 

Answer 1

This is an example of an exponential growth problem. Exponential growth can be modeled by the equation P = a(r)^t, where a is the initial amount, t is the time that has passed, P is the amount after time t, and r is the rate of growth.

 

For your problem, t = 5 years and P = 600. The money increases by 1/10 = 10% each year, so each year, the amount of money is 110% of the previous year. That's a rate of growth of r = 1.1. So:

 

600 = a(1.1)⁵

600 = 1.61051a

372.55 = a

 

The sum was initially Rs. 372.55.