Multiple choice

At what rate per cent per annum will a sum of Rs. 15,625 amount to Rs. 21,952 in three years, if the interest is compounded annually?

  1. 12%

  2. 10%

  3. 9%

  4. 8%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For compound interest: Amount = Principal(1 + r/100)^t. Here, 21952 = 15625(1 + r/100)³. Dividing: 21952/15625 = 1.404. We need (1 + r/100)³ = 1.404. Testing 12%: (1.12)³ = 1.12 × 1.12 × 1.12 = 1.2544 × 1.12 = 1.404928. This matches, so r = 12%.

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