Multiple choice

If the compound interest accrued on an amount of rs.12000 in two years is Rs. 1738.80 at the certain rate of interest. Find the rate of interest.

  1. 5%

  2. 7%

  3. 6%

  4. 7.5%

  5. None of these
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B Correct answer
Explanation

Using the compound interest formula A = P(1 + r/100)^n, where CI = A - P = Rs. 1738.80, P = Rs. 12000, n = 2 years. Solving: 12000(1 + r/100)^2 - 12000 = 1738.80, which gives (1 + r/100)^2 = 1.1449, so 1 + r/100 = 1.07, and r = 7%. The pattern shows that 7% is the correct rate.

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