Question

Find the rate of interest for a sum that becomes 725/625 times of itself 2 years, when compounded annually.

Answer 1

Let the principal be P

Given, time = 2 years and Rate of interest = ?

 

then Amount A = 729/625P 

Now,


Hence, rate of interest is 8% per annum.

Answer 2

P=p, t=2,r=x% p.a. Now, A=729/625p=p(1+x/100)²=27/25=1+x/100,x=8%