Question

Compound interest on a certain sum at a certain rate at the end of two year is Rs. 15600 and at the end of fourth year is Rs.36833.33 Find the rate of interest per annum?

Answer 1

Dear Student,

◆ Answer -

r = 16.67 %

● Explaination -

Given that compound interest after 2 yrs is 15600.

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

15600 = P [(1+r)^2 - 1] ...(1)

This compound interest becomes 36833.33 after 4 yrs.

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

36833.33 = P [(1+r)^4 - 1] ...(2)

Dividing (2) by (1),

36833.33 / 15600 = {P[(1+r)^4-1]} / {P[(1+r)^2-1]}

2.3611 = [(1+r)^4-1] / [(1+r)^2-1]

2.3611 = (1+r)^2 + 1

1.3611 = (1+r)^2

1+r = 1.1667

r = 0.1667

r = 16.67 %

Therefore, rate of interest is 16.67 p.c.p.a.

Hope this helps you...