A sum of ₹10,000 becomes ₹14,400 on compound interest in 2 years. What is the rate of interest per annum?
Answer & explanation
Correct answer: option 3
Principal, P = 10000
Amount, A = 14400
time, t = 2 years
A = $P (1+r%)^t$ = $10000 (1+r%)^2$ = 14400
$(1+r%)^2$ = 1.44
(1+r%) = 1.2
r% = 1.2-1 = 0.2
r/100 = 0.2
r = 20%
The correct answer is Option (3) → 20%