Rs.625 becomes Rs.1296 in four years at compound interest. The rate of interest per annum is:
Answer & explanation
Correct answer: option 1
In 3 years : Principal : Amount = 625 : 1296 = (5)4 : (6)4
In 1 year : Principal : Amount = \(\sqrt[4]{5^4 }\) : \(\sqrt[4]{6^4 }\) = 5 : 6
Interest = 6 - 5 = 1R
Interest rate = \(\frac{1}{5}\) × 100% = 20%