Question

The compound interest accrued on an amount of rs. 25,500 at the end of three year is rs.8,440.5.

Answer 1

We have to find the rate of compound interest :

Given:

• Sum = Rs. 25500

• Time = 3 years

• Interest = Rs. 8440.50

Then, amount = sum + interest

= Rs. (25500 + 8440.50)

= Rs. 33940.50

We know that,

A = P (1 + r/100)^t, where A = amount

P = sum

r = rate of interest

t = time

Then, 33940.50 = 25500 * (1 + r/100)^3

or, (1 + r/100)^3 = 1.331

or, 1 + r/100 = 1.1 [ taking ^(1/3) in both sides ]

or, r/100 = 1.1 - 1

or, r = 100 * 0.1

or, r = 10

∴ the rate of interest is 10%.