Multiple choice

At what percentage rate will the amount of Rs 40000 become Rs 44100 in two years where the interest is compounded annually?

  1. 2

  2. 5

  3. 4

  4. 7.5

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

Using compound interest formula A = P(1 + r/100)^t: 44100 = 40000(1 + r/100)^2. Solving: (1 + r/100)^2 = 44100/40000 = 1.1025. Taking square root: 1 + r/100 = 1.05. Therefore r = 5%. The rate is 5% per annum compounded annually.

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