A sum of ₹16,875, when invested at r% interest per year compounded annually, amounts to ₹19,683 after 2 years. What is the value of r?

8

The Formula that we used here is -

Amount = P$(1 \;+\; \frac{R}{100})^t$

19683 = 16875 [ 1 + \(\frac{r}{100}\) ]²

\(\frac{19683}{16875}\) = [ 1 + \(\frac{r}{100}\) ]²

1.1664 = [ 1 + \(\frac{r}{100}\) ]²

( 1.08)² = [ 1 + \(\frac{r}{100}\) ]²

1 + \(\frac{r}{100}\) = 1.08

\(\frac{r}{100}\) = 0.08

r = 8%

So, Rate is 8%