Question
If Rs. 4000 becomes Rs. 5760 in 2 years at compound
interest (compounded annually), then what is the annual rate of interest?Solution
We can say that the value for rate of interest cab be taken as ‘r’ = 5760 = [4000 × (1 + (r/100))2] (5760/4000) = (1 + (r/100))2] 1.44 = (1 + (r/100))2] 1.2 = (1 + (r/100))] Hence the value for r will be = 20%
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