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 ?
3 answers
5 p.c.p.a
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
(1+r)^2 = 1.1025
1+r = √1.1025 = 1.05
r = .05
so the rate is 5% per annum compounded annually
The interest in 2 years is 594.5 which is 10.25% of 5800. Hence the rate of interest is 5% p.a.