Question

At what rate percent per annum will a sum of Rs 4000 yield a compound interest of Rs 410 in two years?

Answer 1

Hi,

Based on your data, please find the details.

Tried For: Rate of Return

Input:

Deposit Amount = 4000

Future Amount = 4410

Interest Frequency = Yearly

Tenure (In Months) = 24

Results:

Interest Earned = 5.00 %

Answer 2

Principal = Rs 4000

Interest = Rs 410

A = Principal + interest

A = 4000 + 410 = 4410

Find the interest rate:

A = P( 1 + r)ⁿ

4410 = 4000(1 + r)²

1.1025 = (1 + r)²

1 + r = √1.1025

1 + r = 1.05

r = 1.05 - 1 = 0.05

Convert decimal to percentage:

0.05 = 5%

Answer: 5% will yield Rs 410 in 2 years