Question

At what rate of compound interest per annum will a sum of rs 1200 become rs 1348.32 in 2years

Answer 1

Accumulated amount formula :

P (1 + i) ⁿ

P = principle amount = 1200

i = interest rate

n = Time in years = 2

Accumulated amount = 1348.32

1200 × (1 + i) ² = 1348.32

(1 + i) ² = 1348.32 / 1200 = 1.1236

1 + i = (1.1236) ^0.5

1 + i = 1.06

i = 1.06 - 1

i = 0.06 × 100% = 6%