Question

4. Find the rate of compound interest for Rs. 10,000 amounts to Rs. 11,000 2 pm
in two years.​

Answer 1

Given:

Principle money,P=Rs 10,000

Amount,A=Rs 11,000

Time,t=2 years

To find:

Rate of compound interest

Solution:

We know that

$Amount=P(1+\frac{r}{100})^t$

Using the formula

$11000=10000(1+\frac{r}{100})^2$

$\frac{11000}{10000}=(1+\frac{r}{100})^2$

$1.1=(1+\frac{r}{100})^2$

$\sqrt{1.1}=1+\frac{r}{100}$

$1.049-1=\frac{r}{100}$

$0.049=\frac{r}{100}$

$r=0.049\times 100=$4.9%

Hence, the rate of compound interest=4.9%