Question 43
A sum of money compounded annually becomes Rs.625 in two years and Rs.675 in three years. The rate of interest per annum is
Solution
As we know, formulae of compound interest for 2 years will be:
$$P(1+\frac{r}{100})^{2}$$ = 625 (Where r is rate, P is principal amount)
For 3 years:
$$P(1+\frac{r}{100})^{3}$$ = 675
Dividing above two equations we will get r=8%
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