Question

a sum compounded annually becomes 25/16 times itself in 2 years . Determine the rate of interest per annum. ​

Answer 1

♤See the attachment ♤

Hence, the rate of interest = 25%.

Extra Information:

What is a sum?

=> Here, it means a particular amount of money in percentage.

What is compound annually?

=>Here , it means it is a method of calculating and adding interest to an investment or a loan once a year , or for any other particular period.

What is Principal (P)?

=> Amount which is invested is known as principal.

What is rate of interest?

=> An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed. 

What is per annum ?

=> Any amount for each year .

Answer 2

question:-

a sum compounded annually becomes 25/16 times itself in 2 years . Determine the rate of interest per annum.

solution:-

let rate % be x

amount=25/16x

to find rate percent we need to:

$formula = a = p(1 + \frac{r}{100} ) ^{t}$

so:

$\frac{25}{16} x = x(1 + \frac{r}{100} ) ^{2}$

$= \frac{25}{16} = (1 + \frac{r}{100} ) ^{2}$

$= \frac{5}{4} = 1 + \frac{r}{100}$

therefore r is :

$(\frac{5}{4} - 1 )100$

R%=25%