Question

Calculate the rate % at which a sum of money becomes 27/8 times in 3 years , the interest being compounded annually.

Answer 1

Answer:

Interest rate = 50%

Step-by-step explanation:

Let the principal amount = P, Rate of Interest = r, Time  = 3 years

The maturity amount 27P/8

$\frac{27P}{8} =P(1+\frac{r}{100} )^3\\\\\frac{27}{8} =(1+\frac{r}{100} )^3\\\\(\frac{3}{2})^3=(1+\frac{r}{100} )^3\\\\\frac{3}{2}= 1+\frac{r}{100}\\\\\frac{3}{2}-1=\frac{r}{100}\\\\\frac{1}{2}=\frac{r}{100}\\\\\frac{100}{2}= r\\\\r=\frac{100}{2}=50\%$