A sum of money becomes Rs. 6720 after 2 years and Rs. 7392 after 3 years at compound interest. What is the rate of interest per annum?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 10%.
Given: Amount after 2 years = ₹6720
Amount after 3 years = ₹7392
At compound interest,
Amount after 3 years = Amount after 2 years × (1 + r/100)
So, 7392 = 6720 × (1 + r/100)
⇒ (1 + r/100) = 7392 ÷ 6720 = 1.1
⇒ r/100 = 0.1
⇒ r = 10% per annum