Question

At What Rate per cent per annum will
rupees 5000 amounts to rupees 5832
in 2 years
compounded anually
​

Answer 1

Rate of Interest = 8% p.a.

Step-by-step explanation:

We are given that Rs. 5000 amounts to Rs. 5832 in two years compounded  annually.

Let the Principal sum of money = P

Rate of Interest = R

Time Period = T

Amount of money = A

As we know that compound interest formula is given by;

          Amount =  $Principal \times (1+ Rate of Interest)^{Time}$

                                       Or

                        $A=P\times (1+R)^{T}$

Now, we are given with P = Rs 600 , A = Rs 683.20 and T = 2 years; we have to find the rate of interest ;

So, putting values in above equation we get;

                         $5832=5000 \times (1+R)^{2}$

                         $(1+R)^{2} = \frac{5832}{5000}$

                           $(1+R)^{2} = 1.1664$

Taking square root on both sides, we get;

                          (1 + R) =  $\sqrt{1.1664}$

                          (1 + R) = 1.08

                            R = 1.08 - 1 = 0.08 or 8%

Therefore, rate of interest is 8% per annum.

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