The value of a property is increasing at the rate of 25% every year. By what percent will the value of the property increase after 3 years?
Solution:
It is given that
Original price of the property (P) = ₹ 100
Rate of increase (r) = 25% p.a.
Period (n) = 3 years
We know that
Increased value after 3 years = P (1 + r/100)n
Substituting the values
= 100 (1 + 25/100)3
By further calculation
= 100 × 5/4 × 5/4 × 5/4
= ₹ 3125/16
Here
Increased value = 3125/16 – 100
Taking LCM
= (3125 – 1600)/ 16
= 1525/16
So the percent increase after 3 years = 1525/16 = 95 5/16%
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