At what rate of compound interest does a sum of money become 3.375-fold in 3 years, compounding annually?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. 50%.
Let the principal be Rs x
Rate of interest = r%
Time = 3 years
According to the question,
⇒ 3.375x = x (1 + r/100)3
⇒ (1 + r/100)3 = 3.375
⇒ (1 + r/100)3 = (1.5)3
⇒ r = 50%
Rate of interest = 50%