Multiple choice

Rs. $2000$ amounts to Rs. $2226.05$ in two years at compound interest. The rate of interest is

  1. $5.0$ per cent
  2. $5.25$ per cent
  3. $5.5$ per cent
  4. $6.0$ per cent
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using the compound interest formula, A = P(1 + r/100)^n, we have 2226.05 = 2000(1 + r/100)^2. Dividing both sides by 2000 gives (1 + r/100)^2 = 1.113025. Taking the square root of both sides yields 1 + r/100 = 1.055, which gives r = 5.5%.

AI explanation

Using the compound amount formula A = P(1 + r/100)^2, we have 2226.05 = 2000 * (1 + r/100)^2. This simplifies to (1 + r/100)^2 = 2226.05 / 2000 = 1.113025. Taking the square root gives 1 + r/100 = 1.055, so r/100 = 0.055 and r = 5.5 per cent.

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