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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