Question

At what rate per cent per annum compound interest, will ₹ 4000 amount to ₹ 5324 in 3 years?

Answer 1

We are given:

1. Principal (P) = 4,000 
2. Amount (A) = ₹ 5,324 
3. Time (n) = 3 years
4. We need to find the rate of interest (R) (compounded annually)

Step 1: Use the compound interest formula:

`A = P(1 + R/100)^n`

`5324 = 4000(1 + R/100)^3`

⇒ `(1 + R/100)^3 = 5324/4000 = 1.331`

Now take cube root on both sides:

`1 + R/100 = root(3)(1.331) = 1.1`

⇒ `R/100 = 1.1 - 1 = 0.1`

⇒ R = 10%

The required rate of interest is 10% per annum.