Find the compounding rate of return if you deposit rs 100 and would receive rs 114 after one year?
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Solution :-
It is assumed that interest is being compounded annually in this question.
A = P(1 + R/100)ⁿ
Given -
A = Rs. 114, P = Rs. 100, Time = 1 year, Rate of Interest = ?
⇒ 114 = 100(1 + R/00)¹
⇒ 114/100 = (100 + R)/100
Cross Multiplying
⇒ 114*100 = (100 + R)*100
⇒ 11400 = 10000 + 100R
⇒ 100R = 11400 - 10000
⇒ 100R = 1400
⇒ R = 1400/100
⇒ R = 14 %
So, Rate of Interest is 14 %
Answer.
It is assumed that interest is being compounded annually in this question.
A = P(1 + R/100)ⁿ
Given -
A = Rs. 114, P = Rs. 100, Time = 1 year, Rate of Interest = ?
⇒ 114 = 100(1 + R/00)¹
⇒ 114/100 = (100 + R)/100
Cross Multiplying
⇒ 114*100 = (100 + R)*100
⇒ 11400 = 10000 + 100R
⇒ 100R = 11400 - 10000
⇒ 100R = 1400
⇒ R = 1400/100
⇒ R = 14 %
So, Rate of Interest is 14 %
Answer.
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