Question
At what annual compound interest rate will a principal
amount of Rs. 16,000 grow to Rs. 25,000 in 2 years?Solution
Let the rate of interest be R% per annum According to question, 25000 = 16000 × (1 + R/100)2 (1 + R/100)2 = 25/16 Taking positive square root both sides 1 + R/100 = 5/4 R/100 = 5/4 – 1 = 1/4 R = 25%
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