A certain sum of money becomes Rs.24000 in 3 years and it becomes Rs.27783 in 6 years. Find the rate of interest, if compounded annually.
Answer & explanation
Correct answer: option 3
Let the Sum = P
P → 3 years → 24000 → in next 3 years → 27783
\(\frac{27783}{24000}\) = (1 + \(\frac{R}{100}\))3
\(\frac{9261}{8000}\) = (1 + \(\frac{R}{100}\))3
(\(\frac{21}{20}\))3 = (1 + \(\frac{R}{100}\))3
1 + \(\frac{1}{20}\) = 1 + \(\frac{R}{100}\)
⇒ \(\frac{1}{20}\) = \(\frac{R}{100}\) ⇒ R = 5%