Question

solve this sum

I need explanation

find rate​

Answer 1

Answer

Rate of interest=7%

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 =

                                       Or

                         

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;

                       

                         

                         

Taking square root on both sides, we get;

                          (1 + R) =

                          (1 + R) = 1.07

                            R = 1.07 - 1 = 0.07 or 7%

Therefore, rate of interest is 7% per annum.