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At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years? -

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Question

At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?

Options

  • 6%

  • 6.5%

  • 7%

  • 7.5%

MCQ

Solution

6%

Explanation:

Let the rate be R% p.a.

Then, 1200 x = `(1 + R/100)^2` = 1348.32 

⇒ `(1 + R/100)^2 = 134832/120000 = 11236/10000`

∴ `(1 + R/100)^2 = (106/100)^2`

⇒ `1 + R/100 = 106/100`

⇒ R = 6%

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Simple and Compound Interest (Entrance Exam)
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