Question

A sum of ₹200 lent out at compund interest compounded annually amounts to ₹220.50 in 2 years. What is the rate of interest?

Answer 1

Use the formula for compound interest.

P = ₹ 200. A = ₹220.50. n = 2 years.
r = ??

$a \: = p \: {(1 + \frac{r}{100} )}^{2} \\ 220.50 = 200 \times {(1 + \frac{r}{100}) }^{2} \\ 1 + \frac{r}{100} = \sqrt{1.1025} = 1.05125 \: approximately. \\ r = 5.125\% \: approx.$
answer 5.125% Approx.

Answer 2

ANSWER
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FORMULA OF COMPOUND INTEREST
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MEANS
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P = 200 ₹

A = 220. 50 ₹

TIME = 2 YEARS....

THEREFORE
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$a = p \: (1 + \frac{r}{100} {}^{2} ) \\ 220.50 = 200 \times (1 + \frac{r}{100} ) {}^{2} \\ 1 + r \frac{r}{100} = \sqrt{1.1025} \\ = 5.125$