Question

At what rate of interest per annum will a sum of Rs. 62,500 earn a compound interest of Rs. 5,100 in one year? The interest is to be compounded half yearly.

Answer 1

r = ? P = 62,500 C.I = A - P = 5100

A = 5100 + 62500

= 67,600

A = P`(1+ r/200)^(2n)`

`67600 = 62500 (1 + r/200)^2`

= `(1 + r/(200 ))^(2) = [67,600]/[62,500]`

= `(26/25)^2`

= `1 + r/200 = 26/25`

= `r/200 = 26/25 -1`

= `1/5`

`r =200/25`

= 8%

 = r = 8

The rate of interest is 8%.