Question 138

At what rate of compound interest per annum will a sum of ₹1200 become ₹1348.32 in 2 years ?

Solution

Principal sum = Rs. 1200 and amount after 2 years = Rs. 1348.32

Let rate of interest = $$r\%$$

Amount when interest is compounded annually = $$P(1+\frac{R}{100})^T$$

=> $$1200(1+\frac{r}{100})^2=1348.32$$

=> $$(1+\frac{r}{100})^2=\frac{1348.32}{1200}$$

=> $$(1+\frac{r}{100})^2=1.1236$$

=> $$(1+\frac{r}{100})=\sqrt{1.1236}=1.06$$

=> $$\frac{r}{100}=1.06-1=0.06$$

=> $$r=0.06\times100=6\%$$

=> Ans - (C)

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