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Discussion :: Compound Interest

  1. At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?

    2. A.

    6%
    B.

    6.5%
    C.

    7%

     

    D.

    7.5%

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    Answer : Option A

    Explanation :

    Let the rate be R% p.a

     

    Then,1200x[1+\( \frac {R} { 100} ]^2\)== 1348.32

     

    [1+\( \frac {R} { 100} ]^2\)=\(\frac { 134832 } { 120000 } \)=\(\frac { 11236 } {10000 }\)

     

    [1+\( \frac {R} { 100} ]^2\)=\( [\frac { 106 } { 100} ]^2\)

     

      1 +\( \frac {R} { 100} \)=\(\frac { 106 } { 100}\)

     

     R = 6%

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