Multiple choice

The compound interest earned on an amount of Rs 15000 at the end of 3 years is Rs 3895.68. What is the rate of interest p.c.p.a?

  1. 7%

  2. 10%

  3. 8%

  4. 6%

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

8% is correct. Using compound interest formula: Amount = Principal × (1 + r)^n. So 15000 + 3895.68 = 15000 × (1 + r)^3. Therefore 18895.68/15000 = (1 + r)^3. 1.259712 = (1 + r)^3. Taking cube root: 1.08 = 1 + r. So r = 0.08 = 8%. This requires working backwards from CI amount to find the rate.

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