Question

Calculate the rate percent when Rs 28000 amount to Rs 30870 in 2 years at compounded annually.

Answer 1

Here P = Rs.28000, A = 30870, t = 2 years

Now, `"P"(1 + "r"/100)^"t"` =  A

⇒ `28000(1 + "r"/100)^2`

= 30870

⇒ `(1 + "r"/100)^2`

= `(30870)/(28000)`

= `(441)/(400)`

= `(21/20)^2`

⇒ `1 + "r"/(100) = (21)/(20)`

⇒ `"r"/(100) = (21)/(20) - 1`

= `(1)/(20)`

⇒ R = `(100)/(20)`

= 5
Hence rate of interest is 5%.