At what rate percent per annum will ₹7200 amount to ₹7938 in one year, if interest is compounded half yearly?
Answer & explanation
Correct answer: option 4
Interest rate is compounded half yearly , So t = 2
We know,
Amount = Principal × ( 1 + \(\frac{rate }{100}\) )t
7938 = 7200 × ( 1 + \(\frac{rate }{100}\) )²
\(\frac{441 }{400}\) = ( 1 + \(\frac{rate }{100}\) )²
1 + \(\frac{rate }{100}\) = \(\frac{21 }{20}\)
\(\frac{rate }{100}\) = \(\frac{1 }{20}\)
Rate = 5% ( if Interest rate is compounded half yearly )
So , Interest rate per annum = 2 × 5% = 10%