In how many years will a sum of ₹320 amount to ₹405 if interest is compounded at 12.5% per annum?
Answer & explanation
Correct answer: option 1
Formula used-
Amount = P$(1 \;+\; \frac{R}{100})^t$
Here, Compound interest = Rs 320 , Amount = 405 , R = 12.5%, time = t years
405 = 320$(1 \;+\; \frac{12.5}{100})^t$
⇒ \(\frac{405}{320}\) =[$(\frac{9}{8})^t $]
⇒ \(\frac{81}{64}\) = [$(\frac{9}{8})^t $]
⇒ t = 2 years
So, time is 2 years.