Question

If Rs. 600 amounts to Rs.683.20
in two years compounded
fannually, find the rate of
interest
per annum.​

Answer 1

Rate of Interest = 7% p.a.

Step-by-step explanation:

We are given that Rs. 600 amounts to Rs. 683.20  in two years compounded  annually.

Let the Principal sum of money = P

Rate of Interest = R

Time Period = T

Amount of money = A

As we know that compound interest formula is given by;

          Amount = $Principal \times (1+ Rate of Interest)^{Time}$

                                       Or

                          $A=P\times (1+R)^{T}$

Now, we are given with P = Rs 600 , A = Rs 683.20 and T = 2 years; we have to find the rate of interest ;

So, putting values in above equation we get;

                       $683.20=600 \times (1+R)^{2}$

                         $(1+R)^{2} = \frac{683.20}{600}$

                          $(1+R)^{2} = 1.14$

Taking square root on both sides, we get;

                          (1 + R) = $\sqrt{1.14}$

                          (1 + R) = 1.07

                            R = 1.07 - 1 = 0.07 or 7%

Therefore, rate of interest is 7% per annum.  

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Answer 2

Step-by-step explanation:

We are given that Rs. 600 amounts to Rs. 683.20 in two years compounded annually.

Let the Principal sum of money = P

Rate of Interest = R

Time Period = T

Amount of money = A

As we know that compound interest formula is given by;

Amount =

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Now, we are given with P = Rs 600 , A = Rs 683.20 and T = 2 years; we have to find the rate of interest ;

So, putting values in above equation we get;

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1.14

(1 + R) = 1.07

R = 1.07 - 1 = 0.07 or 7%

Therefore, rate of interest is 7% per annum.