Question

A certain sum of money at compound interest becomes * 7,396 in two years and
7,950.70 in three years. Find the rate of interest.​

Answer 1

Answer:

RATE =7.5%

Step-by-step explanation:

When interest earned is compounded annually, then this means that even the interest will earn interest.

In this case the accumulated amount at time 2 years will be the principle for the accumulated amount in time 3 years.

This is because the interest will earn interest. And the period here will be one since from time 2 to 3 the interval is 1.

Calculations:

Let C =principal amount. =rs7396

Accumulated amount =rs7950.70

Formulae:C(1+i)=Accumulated amount.

7396(1+i)=7950.70

1+i=7950.70/7396

1+i=1.075

i=1.075-1

i=0.075

0.075×100%=7.5%

Rate=7.5%