Compound Interest - Arithmetic Aptitude Questions and Answers

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

6.5%

7.5%

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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