1.

A sum amounts to Rs. 1210 in 2 years when invested at compound interest. If principal is Rs. 1000, then what is the rate of interest (in %)?1). 102). 203). 154). 12

Answer»

<P>C = P[(1 + R/100)n - 1]

S = P + C

Where

C = COMPOUND interest

P = Principal

r = rate

n = number of period

S = sum after n periods

In 2 YEARS,

P = 1000

S = 1210

⇒ P + C = 1210

⇒ 1000 + C = 1210

⇒ P[(1 + r/100)n - 1] = 210

⇒ 1000 × [(1 + r/100)– 1] = 210

⇒ (1 + r/100)2 - 1= 0.210

⇒ (1 + r/100)2 = 1.21

⇒ r/100 = (1.21)1/2 - 1 = 1.1 - 1 = 0.1

⇒ r = 10%



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