Multiple choice

At what rate of interest will $Rs. 20000$ become $Rs. 24200$ after $2$ years when interest is compounded annually?

  1. $5 \%$
  2. $6 \%$
  3. $10 \%$
  4. $15 \%$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P(1 + r/100)^n. 24200 = 20000(1 + r/100)^2. 1.21 = (1 + r/100)^2. 1.1 = 1 + r/100. r/100 = 0.1, so r = 10%.

AI explanation

We use the compound amount formula A = P × (1 + R/100)^N. Substituting the given values gives 24200 = 20000 × (1 + R/100)^2, which simplifies to 1.21 = (1 + R/100)^2. Taking the square root of both sides results in 1.1 = 1 + R/100, meaning R/100 equals 0.10. Therefore, the required rate of interest is 10%.

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