At what percentage rate, compound interest compounded annually for a sum of ₹40,000, will amount to ₹44,100 in two years?
Answer & explanation
Correct answer: option 2
Amount = Principal × ( 1 + \(\frac{rate }{100}\) )t
ATQ,
44100 = 40000 × ( 1 + \(\frac{rate }{100}\) )2
\(\frac{21 }{20}\) = 1 + \(\frac{rate }{100}\)
\(\frac{rate }{100}\) = \(\frac{1 }{20}\)
Rate = 5%