At what rate per cent per annum will a sum of Rs 15,625 amount to Rs 21,952 in three years, if the interest is compounded annually?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 12%
Let the rate is 'r%'.
A = P(1 + r/100)n
21952 = 15625(1 + r/100)3
28/25 = (1 + r/100)
3/25 = r/100
r = 12%.