Question

What interest rate, compounded annually, is needed for a principal of PHP5,000.00 to increase to PHP5,500.00 in 1 year?

Answer 1

Answer:

Rate is 10%

Step-by-step explanation:

Principal=₹5,000 (₹P)

Amount =₹5,500 (₹A)

Time =1 Year (n)

Rate =r% (say)

Interest (A-P)= ₹(5500-5000)=₹500

We know, I=P×n×r/100

=> 500=5000×1×r/100

=> r= 500×100/5000

r=10%(ANSWER)