Question

Find the Rate of Interest for a Given Amount
A money has become Rs.1584 in 2 years & Rs.3600 in 4 years for a compound interest of 2 years. Then find the rate of interest?

Answer 1

The formula to be used here is A = P(1 + R/100)^n; where A is the amount, P is the principal, R is the rate of interest and n is the number of times compounding is done.

In this case, we have 1584 = P(1 + R/100)^2 .
This means P = 1584/[(1 + R/100)^2] ---------------- (i)

We also have 3600 = P(1 + R/100)^4
This means P = 3600/[(1 + R/100)^4] -----------------( ii)

Equating (i) and (ii), we get:
1584/[(1 + R/100)^2] = 3600/[(1 + R/100)^4]

Simplifying further we get R = 50% and that is our answer.