Multiple choice

If the compound interest accrued on a sum of Rs. 14,500 in two years is Rs. 4,676.25, then what is the rate of interest p.c.p.a.?

  1. 11%

  2. 9%

  3. 15%

  4. 18%

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P + CI = 14500 + 4676.25 = 19176.25. A = P(1 + r/100)^2. 19176.25 / 14500 = 1.3225. sqrt(1.3225) = 1.15. Thus, 1 + r/100 = 1.15, so r = 15%.

AI explanation

Using the compound interest formula Amount equals Principal times (1 plus R divided by 100) raised to the power of n, the amount is Rs. 14,500 plus Rs. 4,676.25, which equals Rs. 19,176.25. We substitute the values into the formula: 19176.25 equals 14500 times (1 plus R divided by 100) squared. Dividing 19176.25 by 14500 gives 1.3225, and taking the square root provides 1.15, which means (1 plus R divided by 100) equals 1.15. Solving this gives R equals 15%. The rate of interest is 15%.

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