Assignment

On

Logarithms

Submitted to

Professor Dr. Md. Motaher Hossain

Professor

Institute of Business Administration, Jahangirnagar University

Submitted by

Name: Rohit Karmakar

ID no: 2016, Batch: 29th

Course: BUS 103, Business Mathematics.

Institute of Business Administration, Jahangirnagar University.

Date of Submission: August 2, 2020

Example 30. Find the compound interest on Rs. 10,000 for 4 years at 5% per annum. What will
be the simple interest in the above case?

Solution. Here P = 10,000, n = 4,

i = 5/100 = 0.05
We know, A = P(1+i)n
∴ A = 10,000 (1 + .05)4 x = (1.05)4
= 10,000 x (1.05)4 log x = 4 log 1.05
=10,000 x 1.215 = 4 x 0.0212
=12150 = 0.0848
x = anti-log (0.0848)
C.I. = Compound Interest
= 1.215
= A-P = Rs. 2150
S.I. = Simple Interest
= P.n.i.= 10,000 x 4 X (5/100)

= Rs. 2000 (Ans)

Example 31. Find the compound interest on Rs. 6950 for 3 years if interest is payable half yearly,
the rate for the first two years being 6% p.a., and for the third year 9% p.a.

Solution. We have A = P (1+i/2)2n

Here, P = 6950, n = 2, i = 6/100 =0.06

∴ A = 6950 (1+0.06/2)2x2= 6950 (1.03)4
log A = log 6950 + 4 log 1.03
=3.8420 + 4x0.0128
=3.8932

∴ A = antilog (3.8932) =7820, which is the principal for the third year.

Again, A=7820(1 +0.09/2)2x1 (since, n = 1)

Or, A = 7820(1.045)2
log A=log 7820 + 2 log 1.045 = 3.8932 + 2 x 0.0191
= 3.9314

∴ A = anti-log (3.9314) = 8539

∴ C.I. = 8539 – 6950 =Rs. 1589 (Ans)
Example 32. What is the present value of Rs. 10,000 due in 2 years at 8% p.a., C.I. according as
the interest is paid (a) yearly or (b) half- yearly?

Solution. (a) A = P(1+i)n

Here A = 10,000, i = 8/100 = .08, n = 2

∴ P = A/(1+i)n = 10000/(1.08)2

⇒ log P = log 10,000 – 2 log 1.08 = 4 – 2 x 0.0334

= 3.9332
∴ P = anti-log (3.9332) = Rs. 8574 (Ans)

(b) A = P(1+i/2)2n
Here A = 10,000, i/2= 0.08/2 = 0.04
∴ P = 10,000/(1.04)2x2
⇒ log p = log 10,000 – 4 log 1.04 = 4 – 4 × 0.0170
= 3.9320
∴ P = Rs. 8551. (Ans)

Example 33.Mr. Mehta borrowed Rs. 20,000 from a money- lender but he could not repay any
amount in a period of 4 years. Accordingly the money- lender demands now Rs. 26,500 from
him. At what rate per cent per annum compound interest did the latter lend his money?

Solution. We have A = P(1+i)n

Here A = 26,500, P = 20,000, n = 4, i =?

∴ 26,500 = 20,000(1+i)4

Taking logarithms, we get

log 26,500 = log 20,000 + 4 log (1+i)

⇒ log (1+i ) = (log 26500 – log 20000)/4

= (4.4232-4.3010)/4 = 0.0305

∴ (1+i ) = anti-log (0.0305) = 1.073

⇒ i= 1.073 – 1 = 0.073
Hence the required rate per cent = 100 × i = 100 × 0.073 = 7.3 (Ans)
Example 34. (a) Find the number of years and the fraction of a year in which a sum of money
will treble itself at compound interest at 8 percent per annum.
(b) In what time will a sum of Rs. 1234 amount to Rs. 5678 at 8% p.a. compound interest,
payable quarterly?

Solution. (a) We have A= P (1+i)n

Let P=100, then A=300 i = 8/100 =0.08
⇒ 300= 100(1.08) n

⇒ 3= (1.08) n

⇒ n= log 3/log 1.08 = 0.4771/0.0334= 14.28 years (Ans)

(b) We have A= P(1+i/4)4n

∴ 5678=1234(1+ 0.08/4 )4n=1234(1.02)4n

Taking log, we get

log 5678= log 1234 + 4n log 1.02

⇒ n= (log 5678 – log 1234)/ 4 log 1.02

⇒ n = (3.7542-3.0913)/ (4 x 0.0086) = 0.6629/0.0344 = 19.27 years (Ans)

Example 35. A man borrows Rs. 750 from a money-lender and the bill is renewed after every
half year at an increase of 21%. What time will elapse before it reaches Rs. 7500?

Solution. Let the time elapsed be n years. Since the bill is renewed every half year, so the
number of half years is equal to 2n.
∴ We have
7500 =750(1+21/100)2n

⇒7500/750= (121/100)2n

⇒10= (121/100)2n

Taking logarithms of both sides, we get

log 10 = 2n(log 121—log 100)

⇒ 1=2n (2.0828—2)

⇒ n = 1/ (2x0.0828) = 6.04

⇒ n= 6 years approximately

Hence it will take about 6 years for Rs. 750 to reach Rs. 7500. (Ans)

Example 36. A machine, the life of which is estimated to be 10 years, costs Rs. 10,000. Calculate
its scrap value at the end of its life, depreciation on the reducing instalment system being
charged at 10% per annum.

Solution. We have,

A=P(1–i)n
Here A=10,000, i=10/100=1/10, n=10
A=10,000(1-1/10)10=10,000 (9/10)10
Taking logarithms, we get
log A = log 10,000 +10 (log 9 – log 10)
= 4 + 10(0.9542 – 1)
=4+9.542 – 10
=3.542
 A = antilog (3.542) = 3483
Hence the scrap value of machine is Rs. 3483. (Ans)
Example 37. A machine is depreciated in such a way that the value of the machine at the end of
any year is 90% of the value at the beginning of the year. The cost of the machine was Rs.
12,000 and it was sold eventually as waste metal for Rs. 200, find out the number of years
during which the machine was in use.

Solution. We have A=P(1–i)n

Here P=12,000, A=200,i=10/100 , n=?
 200 = 12,000 (1-10/100)n
 20 =12,000(9/10)n
(9/10)n=200/12,000
Taking logarithms, we get
n (log 9 – log 10) = log 200 – log 12,000
n(0.9542 –1) = 2.3010 – 4.0792
 n (–0.0458) = – 1.7782
 n = 1.7782/0.0458 = 39 years (approx.)

Hence the machine was in use for 39 years (Ans)