How Long Does It Take for Rs. 1000 to Grow to Rs. 10,000 at 15% Simple Interest?
Investing money is a common practice to enhance financial stability and wealth over time. However, understanding how long it will take for a small investment to grow significantly can be crucial for planning. This article explores the conditions under which a sum of Rs. 1000 can grow to Rs. 10,000 at a simple interest rate of 15% per annum. We will delve into the mathematical calculations and provide a step-by-step explanation.
Understanding Simple Interest
Simple interest is a straightforward method of calculating interest on a principal amount. The formula for simple interest (SI) is given by:
SI P times; T times; R / 100
Where:
P is the principal amount (initial amount of money invested).
T is the time period of the investment (expressed in years).
R is the annual interest rate (expressed as a percentage).
The Goal
Our goal is to determine the time period (T) required for an initial investment of Rs. 1000 to grow to Rs. 10,000 at an annual simple interest rate of 15%. We need to calculate the time period (T) that satisfies this condition.
Step-by-Step Calculation
According to the information provided:
Initial amount (P) Rs. 1000
Invested at 15 per annum (R) 15%
Total amount Rs. 10000
Using the simple interest formula, we can set up the equation as follows:
Total amount - Principal amount 10000 - 1000 9000
The simple interest (SI) that needs to be earned to reach the total amount is 9000. Therefore, the equation becomes:
SI Principal times; Time times; Rate / 100
9000 1000 times; T times; 15 / 100
Let's solve for T:
9000 (1000 times; T times; 15) / 100
Multiplying both sides by 100:
9000 times; 100 1000 times; T times; 15
900000 15000 times; T
T 900000 / 15000
T 60
Therefore, it will take a time period of 60 years for the initial investment of Rs. 1000 to grow to Rs. 10,000 at a simple interest rate of 15% per annum.
Conclusion
Calculating the time period required for a sum of money to grow at simple interest involves a straightforward application of mathematical principles. The example provided clearly illustrates that with an initial investment of Rs. 1000, a 15% annual interest rate, it will take 60 years to reach Rs. 10,000. Understanding these calculations can help investors plan more effectively and make informed decisions regarding their finances.
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