Ques. The rate of compound interest at which a sum of rs. 8000 amounts to rs. 8820 in 2 years, is:
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Explanation:
Interest rate per conversion period, 210%=5%=0.05
Principal(P)=Rs.8,000
Amount(An)=Rs.8,820
An=P(I+i)n
8,820=8,000(1+0.05)n
8,820/8,000=(1+0.05)n
1.1025=(1.05)n
(1.05)2=(1.05)n
n=2; Hence number of conversion period is 2 and the required time =2n=22=1 year
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