If Rs. 4000 becomes Rs. 5760 in 2 years at compound interest (compound

1.	If Rs. 4000 becomes Rs. 5760 in 2 years at compound interest (compounded annually), then what is the annual rate of interest?1. 10 percent2. 20 percent3. 15 percent4. 25 percent
Answer» Correct Answer - Option 2 : 20 percent Given: The principle = 4000 and Time = 2 years Formula used: \(CA\ =\ P\ \times {(1\ +\ {R\ \over 100})^T}\) (Where CA = Compounded amount, P = The principle, R = The rate of interest and T = Time) Calculation: Let us assume the rate of interest be R ⇒ \(5760\ =\ 4000\ \times {(1\ +\ {R\over 100})^2}\) ⇒ \({5760\over4000} =\ {(1\ +\ {R\over 100})^2} \) ⇒ \(1.44 =\ {(1\ +\ {R\over 100})^2}\) ⇒ \(1.2\ =\ {1\ +\ {R\over 100}}\) ⇒ R = 20% ∴ The required result will be 20%.

If Rs. 4000 becomes Rs. 5760 in 2 years at compound interest (compounded annually), then what is the annual rate of interest?1. 10 percent2. 20 percent3. 15 percent4. 25 percent

Answer» Correct Answer - Option 2 : 20 percent

Given:

The principle = 4000 and Time = 2 years

Formula used:

\(CA\ =\ P\ \times {(1\ +\ {R\ \over 100})^T}\)

(Where CA = Compounded amount, P = The principle, R = The rate of interest and T = Time)

Calculation:

Let us assume the rate of interest be R

⇒ \(5760\ =\ 4000\ \times {(1\ +\ {R\over 100})^2}\)

⇒ \({5760\over4000} =\ {(1\ +\ {R\over 100})^2} \)

⇒ \(1.44 =\ {(1\ +\ {R\over 100})^2}\)

⇒ \(1.2\ =\ {1\ +\ {R\over 100}}\)

⇒ R = 20%

∴ The required result will be 20%.

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