Question

At what rate will a sum of 3200 produce an interest of 672 in 2 years if compounded annually

Answer 1

The rate of interest is 10%

Step-by-step explanation:

Compound interest, CI = 672

Principal, P = 3200

Time, t = 2 years

Compounded Annually

Formula:-$CI=P(1+r)^t-P$

$672=3200(1+r)^2-3200$

$3872=3200(1+r)^2$

$(1+r)^2=\dfrac{3872}{3200}$

$1+r=1.1$

$r=0.1$

The rate of interest is 10%

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