Question

An amount of `8400 becomes ` 11,109 in two years at a certain rate of interest

compounded annually. Find the rate of interest per annum.

Answer 1

Given P=8400
A = 11109
t= 2
Let the rate of interest compounded annually be x

As w know that,
A=P(1+r/100)^t
11109=8400(1+x/100)^2
11109=8400 {(100+x)/100}^2
11109/8400= {(100+x)/100}^2
(23/20)^2= {(100+x)/100}^2
Now the power of 2 gets cancel,
So,
23/20= (100+x)/100
23/20 *100= 100+x
115= 100+ x
Therefore, x= 115-100
Thus the answer is 15%.