A sum of money become 3.375 times of itself in 3 years. Then find the rate of interest if compounded annually.
Answer & explanation
Correct answer: option 3
Amount = P ( 1+ \(\frac{R}{100}\))t
3.375 P = P (1 + \(\frac{R}{100}\))3
(1.5)3 = (1 + \(\frac{R}{100}\))3
1.5 = 1 + \(\frac{R}{100}\)
0.5 = \(\frac{R}{100}\) ⇒ R = 50%