₹3600 becomes ₹4900 in 2 years when kept at compound interest (compounded anaually). What is the rate of interest per annum?
Answer & explanation
Correct answer: option 4
The Formula that we used here is -
Amount = P$(1 \;+\; \frac{R}{100})^t$
4900 = 3600 [ 1 + \(\frac{R}{100}\)]²
\(\frac{4900}{3600}\) = [ 1 + \(\frac{R}{100}\)]²
(\(\frac{7}{6}\))² = [ 1 + \(\frac{R}{100}\)]²
\(\frac{7}{6}\) = 1 + \(\frac{R}{100}\)
\(\frac{R}{100}\) = \(\frac{7}{6}\) - 1
\(\frac{R}{100}\) = \(\frac{1}{6}\)
R = 16\(\frac{2}{3}\)%