Question

Compound interest, compounded annually on a certain sum of money is 0.21 after a period of 2 years. What is the rate of interest per annum?​

Answer 1

Dear Student,

● Answer -

Rate of interest = 10 % per annum.

◆ Explaination -

Compound interest is calculated by -

CI = P [(1+r)^t - 1]

Substitute given values,

0.21 = 1 [(1+r)² - 1]

0.21 = (1+r)² - 1

(1+r)² = 1 + 0.21

(1+r)² = 1.21

1 + r = 1.1

r = 1.1 - 1

r = 0.1

r = 10 %

Therefore, rate of interest is 10 % per annum.

Thanks dear. Hope this helps you...

Answer 2

step by step solution follow the sted