Question
A sum of Rs. 4,000 becomes Rs.
6,912 in 3 years at a certain rate of interest compounded annually. What is the rate of interest?Solution
Let the rate of interest be 'r'%. 4000 X [1 + (r/100)]³ = 6912 Or, 4000 X [(100 + r)³ / (100 X 100 X 100)] = 6912 Or, (100 + r)³ = (6912/0.004) = 1728 X 1000 Or, (100 + r)³ = 12³ X 10³ Or, 100 + r = 120 Or, r = 20%
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