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    Question

    If an investment of Rs. 5,120 grows to Rs. 6,480 in two

    years when compounded annually at an interest rate of 'R%' per annum, calculate the value of 'R'.
    A 20 Correct Answer Incorrect Answer
    B 15 Correct Answer Incorrect Answer
    C 12.5 Correct Answer Incorrect Answer
    D 8 Correct Answer Incorrect Answer

    Solution

    ATQ; 6480 = 5120 × {1 + (R/100)}2 {1 + (R/100)}2 = (6480/5120) = (81/64) Or, {1 + (R/100)} = √(81/64) = (9/8) Or, (R/100) = (9/8) – 1 Or, (R/100) = (1/8) Or, R = 12.5

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