Find out the interest rate:

If Rs. 500 amount to Rs. 583.20 in 2 years compounded annually, find the rate of interest per annum:

  1. 9%
  2. 8%
  3. 7%
  4. None of these
Manish Listener Asked on 30th July 2015 in Maths.
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  • 1 Answer(s)

    Answer: (2) 8 %
    Explanation:-
    Given-
    Principal = Rs.500,   Amount = Rs.583.20,  Time = 2 years  &  Rate = ?

    Formula-
    Amount = P (1 + R/100)t
    Where, P = principal, R = rate & t = time.

    Then, 583.20 = 500(1 + R/100)2
    583.20/500 = (1 + R/100)2
    58320/50000 = (1 + R/100)2
    11664/10000 = [(100 + R)/100]2
    (108/100)2 = [(100 + R)/100]2
    Square root on both side,
    108/100 = (100 + R)/100
    108 = 100 + R
    R = 108 – 100
    R = 8 %
    Hence, the answer is (2) 8 %.

    Anurag Mishra Professor Answered on 30th July 2015.
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