Question

In how many years will ₹50,000 become ₹66,550 at 10% compound interest per annum?

• A. 4
• B. 5
• C. 6
• D. 3

Answer 1

Answer:

D. 3

Use the compound interest formula:

Given:

• Principal, (P = ₹50,000)

• Amount, (A = ₹66,550)

• Rate, (r = 10% = 0.10)

So,

$66,550 = 50,000(1.10)^n$
$\frac{66,550}{50,000} = (1.10)^n$
$1.331 = (1.10)^n$

Since,

$1.10^3 = 1.331$

Therefore,

n = 3

Answer: 3 years