Sohan invested Rs. 6,250 for the future, and he got Rs. 15,552 after 5 years. If the interest is compounded annually, then what is the rate of interest?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 20%
Given that
Sohan invested Rs. 6,250 for future
After 5 years, he got Rs. 15,552
Formula used
Amount = Principal (1 + Rate/100)time
Calculation
⇒ 15552 = 6250 (1 + Rate/100)5
⇒ (1 + Rate/100)5 = 15552/6250
⇒ 1 + Rate/100 = 1.2
⇒ Rate = 20%