If the amount at the end of the 2nd year and 3rd year on a certain principal at compound interest is ₹12,000 and ₹13,200, respectively, find the rate of interest per annum.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 10%.
Amount after 2nd year = ₹12000
Amount after 3rd year = ₹13200
For compound interest:
A3 = A2 (1 + )
⇒ 13200 = 12000 (1 + )
⇒ = 1 +
⇒ 1.1 = 1 +
⇒ = 0.1
⇒ r = 10% per annum