₹12,000 becomes ₹15,972 in a certain period at 10% per annum on compound interest, compounding annually. Find the period.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. 3 years.
We know that,
A = P(1 + R/100)T
where, A = Amount, P = Principal, R = Rate and T = Time
Amount = Principal + Interest
⇒ 15972 = 12000(1 + 10/100)T
⇒ 15972 = 12000(1 + 1/10)T
⇒ 15972 = 12000(11/10)T
⇒ 15972/12000 = (11/10)T
⇒ 1331/1000 = (11/10)T
⇒ (11/10)3 = (11/10)T
T = 3 years