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Question : At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?

Option 1: 7.5%

Option 2: 6.5%

Option 3: 7%

Option 4: 6%


Team Careers360 8th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: 6%


Solution : Given: $P$ = Rs. 1,200, $A$ = Rs. 1,348.32 and $n$ = 2.
We know the formula, $A=P\times(1+\frac{r}{100})^n$.
Substitute the given values in the above formula, we get,
$1348.32=1200\times(1+\frac{r}{100})^2$
⇒ $(\frac{106}{100})^2=(1+\frac{r}{100})^2$
⇒ $\frac{106}{100}=1+\frac{r}{100}$
⇒ $\frac{106}{100}–1=\frac{r}{100}$
⇒ $\frac{106–100}{100}=\frac{r}{100}$
⇒ $\frac{6}{100}=\frac{r}{100}$
$r = 6$%
Hence, the correct answer is 6%.

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