Question

At what rate will a sum of rs. 1000 amount to rs. 1102.50 in 2 yr at compound interest?

Answer 1

Accumulated amount formula :

P(1 + i) ⁿ

Principle amount = 1000

Accumulated amount = 1102.50

i = interest rate

n = Time in years = 2

1000 × (1 + i) ² = 1102.50

(1 + i) ² = 1102.50/1000

(1 + i) ² = 1.1025

1 + i = 1.1025

i = 1.1025 - 1

i = 0.1025

i = 0.1025 × 100

i = 10.25%