Question

At what rate percent per annum will Rs. 4800 yield an interest of Rs. 747 in 2 years compounded annually?

Answer 1

Interest will be between 14.5% and 15%

Answer 2

Answer:

7.5%

Step-by-step explanation:

Principal = Rs.4800

Interest = Rs.747

Amount = Principal + Interest = Rs.4800+Rs.747=Rs.5547

Time = 2 years

No. of compounds per year = 1

Let rate of interest be r%

$A=P(1+\frac{r}{100})^t$

$5547=4800(1+\frac{r}{100})^2$

$5547=4800(1+\frac{r}{100})^2$

r=7.5%

Hence the rate of interest is 7.5%