Question 177

The compound interest accrued in 2 years on a principal of ‘ 15,800 is 7716.72. What is the rate of interest p.c.p.a. ?

Solution

Let the amount be a and rate of interest be r

compound interest = $$a(1+r)^{2}-a$$

$$a(r^{2}+2r)$$ = 7716.72.

$$(r^{2}+2r)$$ = 7716.72/15,800

solving the abobe quadratic equation,we get r =0.22

Hence rate of interest is 0.22

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