Multiple choice

If the amount is 2.25 times of the sum after 2 years at compound interest compounded annually, the rate of interest per annum is

  1. 25%

  2. 30%

  3. 45%

  4. 50%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For compound interest: Amount = Principal × (1 + r/100)^n. Given: 2.25P = P(1 + r/100)^2. Therefore (1 + r/100)^2 = 2.25 = 1.5^2, so 1 + r/100 = 1.5, giving r = 50%. Option D is correct.

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