Question

Ruby invested an amount of Rs. 5,800 for 2 years. At what rate of compound interest will she get an amount of Rs. 6394•5 at the end of two years ?

Answer 1

5 p.c.p.a

Answer 2

5800(1+r)^2 = 6394.50
(1+r)^2 = 1.1025
1+r = √1.1025 = 1.05
r = .05

so the rate is 5% per annum compounded annually

Answer 3

The interest in 2 years is 594.5 which is 10.25% of 5800. Hence the rate of interest is 5% p.a.