Question
A principal amount is invested at an annual compound
interest rate of y%. After 2 years, the investment grows to Rs. 7200, and after 4 years, it reaches Rs. 10368. Determine the value of 'y'.Solution
Let the sum invested = Rs. K We have, K X {1 + (y/100)}2 = 7200 And, K X {1 + (y/100)}4 = 10368 So, 10368 ÷ 7200 = [K X {1 + (y/100)}4] ÷ [K X {1 + (y/100)}2] Or, 1.44 = {1 + (y/100)}2] = {(100 + y)/100}2 Or, {(100 + y)/100} = √1.44 = 1.2 Or, 100 + y = 120 So, y = 20 Hence, option a.
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