Question
At what rate per cent per annum will a sum of 15,625
amount to 21,952 in three years, if the interest is compounded annually?Solution
ATQ, Let the rate of interest per annum be R. 21952 = 15625(1 + R/100)3 ⇒ 21952/15625 = (1 + R/100)3 ⇒ ∛(21952/15625) = 1 + R/100 ⇒ 28/25 = 1 + R/100 ⇒ 28/25 – 1 = R/100 ⇒ (28 – 25)/25 = R/100 ⇒ 3/25 = R/100 ⇒ R = (3/25) × 100 ⇒ R = 3 × 4 ⇒ R = 12%
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