Question

The compound interest and the amount obtained on a certain sum of money are Rs. 752.40 and Rs. 4752.40 respectively after 2 years. If the rate of interest is compounded yearly, Find the rate?
1. 11%
2. 9%
3. 8%
4. 7%

Answer 1

Correct Answer - Option 2 : 9%

GIVEN:

C.I = Rs. 752.40

A = Rs. 4752.40

T = 2 years

FORMULA USED:

A = P (1 + R/100)^T

CALCULATION:

P = A - C.I

⇒ 4752.40 - 752.40 = Rs. 4000

A.T.Q

4752.40 = 4000 (1 + R/100)²

⇒ 47524/40000 = (1 + R/100)²

⇒ 11881/10000 = (1 + R/100)²

⇒ (1 + R/100) = 109/100

⇒ R/100 = 9/100

⇒ R = 9%

∴ The rate is 9%.