Question

At what rate per cent will a sum of ₹ 640 be compounded to ₹ 774.40 in two years?

Answer 1

Answer

A = P(1+r/100)^n 
774.40 = 640(1+r/100)^2 
774.40/640 = (1+r/100)^2 
1.21 = (1+r/100)^2 
1+r/100 = sqrt 1.21 
1+r/100 =1.1 
r/100 = 1.1 - 1 = 0.1 
r = 0.1*100 = 10 
Therefore Rate of Interest = 10% p.a.


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