In a bank, principal increases continuously at the rate of r% per year. Find the value of r if Rs 100 double itself in 10 years (loge2 = 0.6931).

Question

Philoid · Accepted Answer

let t be time

p be principal

r be rate of interest

according the information principal increases at the rate of r% per year.

Separating variables,

Integrating both sides,

Given that t = 0, p = 100.

Now, if t = 10, then p = 2×100 = 200

So,

So r is 6.93%.