Multiple choice

At what rate of compound interest per annum will a sum of Rs. 10,000 become Rs. 12,321 in 2 years?

  1. 22%

  2. 11%

  3. 7%

  4. 15%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A = P(1 + r/100)^n. 12321 = 10000(1 + r/100)^2. 1.2321 = (1 + r/100)^2. sqrt(1.2321) = 1.11. So 1 + r/100 = 1.11, r = 11%.

AI explanation

Using the compound interest formula Amount = Principal * (1 plus Rate / 100) raised to the power of Time, we set up the equation 12321 = 10000 * (1 plus R / 100)^2. Dividing both sides by 10000 gives (1 plus R / 100)^2 = 1.2321. Taking the square root of both sides results in 1 plus R / 100 = 1.11, which simplifies to R = 11 percent.

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