Question

calculate the rate in percent per annum of compound interest if 5000 becomes 20000 in 4 years​

Answer 1

The rate of interest is 41.4%.

• The compound interest on Rs. 5000 is Rs. 20000 in 4 years.

• The formula for compound interest is,

• Compound Interest = $P(1 +\frac{R}{100})^n$

• Substituting the known values to find the rate of interest,

• P = Rs. 5000 , Compound interest = Rs. 20000 , n = 4 years

20000 = 5000 $(1+\frac{R}{100})^4$

4 = $(1+\frac{R}{100})^4$

${4}^{\frac{1}{4}}$ = $(1+\frac{R}{100})$

1.414 = $(1+\frac{R}{100})$

0.414 = $(\frac{R}{100})$

R = 41.4%

• Rate of interest = 41.4%