Multiple choice

At what rate of interest, compounded annually, should a sum of Rs 10,000 be invested, such that the amount becomes thrice the principal in 3 years? (Round your answer to the nearest integer)

  1. 24%

  2. 42 %

  3. 44%

  4. 62%

  5. 56%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using compound interest formula: A = P(1 + r/100)^t. Given A = 3P, t = 3 years. So 3P = P(1 + r/100)³, meaning (1 + r/100)³ = 3. Therefore 1 + r/100 = ³√3 ≈ 1.442, so r/100 ≈ 0.442, r ≈ 44.2%. Rounded to nearest integer: 44%.

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