A certain sum of money becomes 1.44 times of itself in 2 years. Find…

ATQ,

P = 1   →    2yr       →     1.44 (Amount)

                    ↓                    ↓

                ×1/2              square root*

                    ↓                    ↓

P = 1   →    1yr      →       1.2times

Interest = 1.2 - 1 = 0.2

Interest rate =  \(\frac{0.2}{1}\) × 100 = 20%

 

OR

Amount = P (1+ \(\frac{r}{100}\))^t

ATQ,

⇒ 1.44P = P (1+ \(\frac{r}{100}\))²  

⇒ 1.44 = (1+ \(\frac{r}{100}\))²

⇒ 1.2 = (1+ \(\frac{r}{100}\))¹

⇒ Interest = 1.2 - 1 = 0.2

⇒ Interest rate =  \(\frac{0.2}{1}\) × 100 = 20%