Question 61

At what rate of compound interest per annum will a sum of Rs 20000 become Rs 23328 in 2 years?

Solution

Let rate of interest = $$r\%$$ and time period = 2 years

Principal = Rs. 20,000 and Amount = Rs. 23,328

Amount after compound interest = $$P(1 + \frac{R}{100})^T$$

=> $$20,000 (1 + \frac{r}{100})^2 = 23328$$

=> $$(1 + \frac{r}{100})^2 = \frac{23328}{20000} = 1.1664$$

=> $$(1 + \frac{r}{100}) = \sqrt{1.1664} = 1.08$$

=> $$\frac{r}{100} = 1.08 - 1 = 0.08$$

=> $$r = 0.08 \times 100 = 8\%$$

=> Ans - (A)

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