At what percent per annum will ₹6000 amounts to ₹7986 in 3 years if the interest is compounded annually?
Answer & explanation
Correct answer: option 1
From the formula for Amount with compound interest . we know,
A = P(1+$\frac{R}{100})^t$
7986 = 6000 [ 1 + \(\frac{R}{100}\) ]³
\(\frac{1331}{1000}\) = [ 1 + \(\frac{R}{100}\) ]³
( \(\frac{11}{10}\) )³ = [ 1 + \(\frac{R}{100}\) ]³
\(\frac{11}{10}\) = 1 + \(\frac{R}{100}\)
\(\frac{R}{100}\) = \(\frac{1}{10}\)
R = 10%
So, Rate of interest is 10%.