Question

The amount at compound interest on a sum for 5 years is ₹ 7800 and for 6 years is ₹ 9048 (interest is compounded annually). What is the rate of interest?

• A. 12%
• B. 15%
• C. 16%
• D. 14%

Answer 1

Answer:

C. 16%

Solution:

Given:

Amount for 5 years = 7800

Amount for 6 years = 9048

Concept:

Amount for 5 years will be the Principal for the 6^th year

Formula used:

$Amount = P\times{[1 + (\frac{R}{100})]^N}$

Calculation:

Given,

Amount for 5 years = 7800

Amount for 6 years = 9048

Principal for 6^th year = 7800

Now,

$9048 = 7800\times{[1 + (\frac{R}{100})}]^1$

⇒$[1+(\frac{R}{100})]= \frac{9048}{7800}$

⇒ $100 + R = (\frac{9048}{7800})\times{100}$

⇒ 100 + R = 116

⇒ R = 116 - 100 = 16

∴ Rate of interest is 16%.