A certain amount invested at a certain rate, compounded annually, grows to an amount in five years, which is a factor of 1.19016 more than to what is would have grown in two years. What is the rate percentage?
Show answer & explanation
Correct answer: D
Explanation
Correct Answer is option 4 i.e. 6
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Concept |
Understanding |
Application |
Fair calculation |
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Formula for CI: A = P(1 + r/100)t |
Let the amount after 2 years be P and Amount after 5 years = 1.19016P. |
Using the formula: 1.19016P = P(1 + r/100)3 ⇒ 1.19016 = (1 + r/100)3 ⇒ 1.059 = 1 + r/100 ⇒ 0.059 = r/100 ⇒r = 5.9 ≈ 6 |
∛1.19016 = 1.059 |