Question

Compound interest on a Sum of 16000 rupees for 2 year is 9000 rupees find the rate

Answer 1

principal= p = 16000

interest per annum = i = ?

time = n = 2 years

compound interest= 9000

compound interest = P{(1+i)^n -1}

9000= 16000{(1+i)^2 -1}

9000=16000(1+i)^2 -16000

9000 + 16000 =16000(1+i)^2

25000 = 16000(1+i)^2

25000/16000= (1+i)^2

1.5625 = (1+i)^2

root over(1.5625) = 1 + i

1.25 = 1 + i

1.25-1 = i

0.25 = i = 25% = rate of interest