Question
'A' invests Rs.10,000 for 3 years at a certain rate of
interest. At the end of the second year, it amounts to Rs.11,664. Calculate the rate of interest per annum, if interest is compounded annually.Solution
A = P x (1 + r / 100)t 11664 = 10000 (1 + r / 100)2 11664 / 10000 = (1 + r / 100)2 (108/100)2 =(1 + r / 100)2 108/100 = 1 + r/100 108 -1/100 = r/100 8/100 = r/100 r = 8%
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