Question

a sum pf money becomes 2.25 times in 2 years at a certain rate of compound interest per annum.find the rate of interest​

Answer 1

Given: A sum of money becomes 2.25 times in 2 years at a certain rate of compound interest per annum.

To find: The rate of interest​.

Solution:

• Let P be the initial amount, R be the rate of interest per cent per year, T be the number of years and A be the final amount.

• Now we have given number of years as 2 and final amount as 2.25 times the innitial amount.

• We know that:

              A = P(1 + R/100)^T

• So, putting values in formula, we get:

              2.25P = P ( 1 + R/100 )^2

              2.25 = ( 1 + R/100 )^2

              (1 + R/100) = √2.25

              (1 + R/100) = 1.5                  

              R/100 = 1.5 - 1

              R/100 = 0.5

              R = 50%

Answer:

          So, the rate of interest is 50% per year.