subhashghosh wrote:

Please explain this bit :

"I divided the principal", i.e, how does division of principal yield interest ?

We can quickly get the percentage if we divide the number for which the percentage is found:

such as,

20% of 40 = 40/5 = 8

10% of 80 = 80/10 = 8

50% of 35 = 35/2 = 17.5

33.33% of 100 = 100/3 = 33 approx

Since 34.1% is close to 33.33%; we can divide the number(or principal by 3 and get the interest); Investment: $100

1st year: 34.1% interest is gotten back on 100: 100/3 = 33.33 approx $34: New principal becomes: Principal+Interest: 100+34=134

2nd year: 34.1% interest on 134; 134/3 = 45: Total: 134+45 = 179(new principal)

3rd year: 179/3 = 60: Total: 179+60 = 239

4th year: 239/3 = 80: Total: 239+80 = 319 > 3(100); end of 4 years, the return was already more than triple.

_________________

~fluke

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