A sum of Rs. 6250 amounts to Rs. 7290 in 2 years at compound interest. Find the rate per annum.
Show answer & explanation
Correct answer: A
Explanation
Given:
Principal = ₹6250
Amount = ₹7290
Time = 2 years
By the formula:
A = P (1 + R/100) × (1 + R/100)
7290 = 6250 × (1 + R/100) × (1 + R/100)
7290 / 6250 = (1 + R/100)²
= 1.1664
√1.1664 = 1 + R/100
1.08 = 1 + R/100
R/100 = 0.08
R = 8% per annum