Multiple choice

The compound interest accrued in two years on a principal of Rs. 15,800 is Rs. 7716.72. What is the rate of interest per annum?

  1. 22%

  2. 16%

  3. 18%

  4. Cannot be determined

  5. None of these
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A Correct answer
Explanation

Using the compound interest formula A = P(1 + r/100)^n, where A = 15800 + 7716.72 = 23516.72 and n = 2, we get (1 + r/100)^2 = 23516.72 / 15800 = 1.4884. Taking the square root, 1 + r/100 = 1.22, so r = 22%.

AI explanation

Using the compound interest formula, the amount is the sum of the principal and the interest, which is Rs. 15800 plus Rs. 7716.72 to equal Rs. 23516.72. This amount equals the principal multiplied by the quantity (1 plus R divided by 100) raised to the power of 2. Dividing the amount by the principal gives 1.488, so the square root of 1.488 is 1.22. This means the rate of interest is 22 percent.

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