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Question : At what rate of compound interest (compounding annually) per annum will a sum of Rs. 250000 becomes Rs. 275625 in 2 years?

Option 1: 8% per annum

Option 2: 3% per annum

Option 3: 10% per annum

Option 4: 5% per annum


Team Careers360 5th Jan, 2024
Answer (1)
Team Careers360 12th Jan, 2024

Correct Answer: 5% per annum


Solution : Given,
Amount = Rs. 275625
Principal = Rs. 250000
Time = 2 years
We know, $A = P(1 + \frac{R}{100})^n$
⇒ $275625=250000(1+\frac{R}{100})^2$
⇒ $(1+\frac{R}{100})^2=\frac{275625}{250000}$
⇒ $(1+\frac{R}{100})=\sqrt\frac{275625}{250000}$
⇒ $(1+\frac{R}{100})=\frac{525}{500}$
⇒ $\frac{R}{100}=\frac{525}{500}-1$
⇒ $\frac{R}{100}=\frac{25}{500}$
⇒ $R=\frac{25}{5}= 5$%
Hence, the correct answer is 5% per annum.

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