Hi,
I want to solve following question:
An investment is made at 12.5% annual simple interest. Find the number of years it will take for the cumulative value of the interest to equal the original investment?
Simple Interest formula is:
V=P(1+rt) Let p =10 & t=1
V= 10(1+12.5) = 135
In just one year the interest obtained is more than the Principal value. Some body please guide me what is my mistake. What I understand is that, I have to find the number of years in which the interest obtained & added (with previous years’ interest ) becomes equal to the Principal.
I want to solve following question:
An investment is made at 12.5% annual simple interest. Find the number of years it will take for the cumulative value of the interest to equal the original investment?
Simple Interest formula is:
V=P(1+rt) Let p =10 & t=1
V= 10(1+12.5) = 135
In just one year the interest obtained is more than the Principal value. Some body please guide me what is my mistake. What I understand is that, I have to find the number of years in which the interest obtained & added (with previous years’ interest ) becomes equal to the Principal.