Question

Find the rate of interest if the interest ₹ 1323 is earned on ₹ 4200 for 3.5 years?

Answer 1

Accumulation factor :

(1 + i) ⁿ × P = A

A = accumulated amount

P = principle amount = 4200

i = interest rate

n = Time in years = 3.5 years

Accumulated amount = principle amount plus interest

Accumulated amount = 4200 + 1323 = 5523

4200 × (1 + i) ^3.5 = 5523

(1 + i) ^3.5 = 5523/4200

(1 + i) ^3.5 = 1.315

(1 + i) = (1.315) ^1/3.5

1 + i = 1.081381

i = 1.08138 - 1 = 0.08138

0.08138 × 100 = 8.138%