Question 71

A sum amounts to Rs.1210 in 2 years when invested at compound interest. If principal is Rs.1000, then what is the rate of interest (in %)?

Solution

Principal = Rs. 1000 and time period = 2 years

Let rate of interest = $$r\%$$

Amount under compound interest = $$P(1+\frac{R}{100})^T$$

=> $$1000(1+\frac{r}{100})^2=1210$$

=> $$(1+\frac{r}{100})^2=\frac{1210}{1000}$$

=> $$1+\frac{r}{100}=\sqrt{1.21}$$

=> $$\frac{r}{100}=1.1-1=0.1$$

=> $$r=0.1\times100=10\%$$

=> Ans - (A)

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