A sum of Rs.1,875 at 4% per annum increased to Rs.2,028 in certain time. If interest is compounded yearly, then what is the time period?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. 2 years
Principal amount (P) = Rs. 1875
Interest rate (r) = 4%
Amount (A) = Rs. 2028
A = P(1 + r/100)t
2028 = 1875(1 + 4/100)t
(26/25)2 = (1 + 4/100)t
(26/25)2 = (26/25)t
time = 2 years