Multiple choice

If a sum of Rs16 becomes Rs81 in 4 years then find the rate of interest at compound interest?

  1. 25%

  2. 50%

  3. 40%

  4. 30%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using compound interest formula: A = P(1 + r)^t. Here 81 = 16(1 + r)^4, so (1 + r)^4 = 81/16 = 5.0625. Taking fourth root: 1 + r = 1.5, so r = 0.5 = 50%. The key is recognizing that we need to find the fourth root of the ratio.

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