Question
A sum of money, when invested at an annual compound
interest rate of 'r%', amounts to Rs. 3,600 after 2 years and Rs. 4,320 after 3 years. Determine the value of 'r'.Solution
Let the sum invested be Rs. 'P'. ATQ; P X {1 + (r/100)}2Â = 3600 ....... (I) P X {1 + (r/100)}3Â = 4320 ....... (II) On dividing equation (II) by equation (I), we have; {1 + (r/100)} = 1.2 Or, 100 + r = 120 So, r = 20
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