Question
An amount of Rs 12,000 becomes Rs 14,520 in 2 years at
compound interest (compounded annually). Find the rate of interest per annum.Solution
ATQ, A = P(1 + r/100)² 14520 = 12000(1 + r/100)² (1 + r/100)² = 14520 / 12000 = 1.21 So 1 + r/100 = √1.21 = 1.1 r/100 = 0.1 ⇒ r = 10% per annum.
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