After a certain time period, a sum of Rs.24,000 invested in a bank will amount to Rs.26,460 when the compound rate of interest is 5% p.a., being compounded annually. In how many months will it amount to Rs.26,460?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 24
Principal (p) = 24000
Rate of interest (r) = 5%
Amount = 26460
Amount = p{1 + r/100}t
26460 = 24000{1 + 5/100}t
{21/20}t = 26460/24000
{21/20}t = {441/400}
{21/20}t = {21/20}2
t = 2 years i.e. 24 months