Question

The compound interest, with interest being compounded annually, on 16,000 for two years is 5,160. What is the rate of interest?

Answer 1

sorry I am weak in maths

Answer 2

Rate of interest = 15%

Step-by-step explanation:

Given:

Principal amount = 16,000

Compound interest = 5,160

Rate of interest = ?

Number of year = 2 year

Computation of Rate of interest:

Rate of interest = $P[(1+r)^n-1]$

$Interset = P[(1+r)^n-1]\\\\5,160= 16,000[(1+r)^2-1]\\\\5,160/16,000= [(1+r)^2-1]\\\\0.3225 = [(1+r)^2-1]\\\\1.3225 = (1+r)^2\\\\r=0.15$

R =15%

Rate of interest = 15%

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