The business was valued at £17000 at the start of 2011. In 6 years, the value of this business was raised to £186000. This is equivalent to a yearly increase of 49.0%.
Given that, A=£17000, P=£186000, r=x%, t=6 years
What is compound interest?
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest.
We know that, [tex]A=P(1+\frac{r}{100} )^{n}[/tex]
Wow, [tex]186000=17000(1+\frac{x}{100} )^{6}[/tex]
⇒[tex]10.94=(1+\frac{x}{100} )^{6}[/tex]
⇒[tex]1.4891=1+\frac{x}{100}[/tex]
⇒[tex]0.4891=\frac{x}{100}[/tex]
⇒x=48.91%~49.0%
Therefore, the value of x is 49.0%.
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