Question

A sum of ₹6,400 earns a compound interest of ₹1,008.80 in 18 months, when the interest is reckoned half-yearly. Find the rate of interest.

Answer 1

Rate of interest = 10%

Explanation:

Given: A sum of ₹6,400 earns a compound interest of ₹1,008.80 in 18 months, when the interest is reckoned half-yearly. Find the rate of interest.

Principal = Rs. 6400

Interest = 1008.80

Period = 18 months = 18 / 12 = 3 / 2 years

Interest reckoned half-yearly.

Amount = principal + interest = 7408.80

Substituting the values in the compound interest formula, we get:

A = P (1 + r/n)^nt

7408.80 = 6400 (1 + r/2)^(2*3/2)

7408.80 / 6400 = (1 + r/2)^3

1.157625 = (1 + r/2)^3

1 + r/2 = cube root of 1.157625 = 1.05

r/2 = 0.05

Therefore r = 0.1

Rate of interest = 0.1 * 100 = 10%

Answer 2

Answer:

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Explanation:

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