Multiple choice

The period in which Rs. 2,000 will amount to Rs. 2,420 at 10% per annum compound interest is

  1. 2.5 years

  2. 2 years

  3. 3 years

  4. 3.5 years
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount = P(1 + r/100)^n. 2420 = 2000(1 + 10/100)^n. 1.21 = (1.1)^n. Since 1.1^2 = 1.21, n = 2 years.

AI explanation

Using the Compound Interest formula, the amount A equals P multiplied by (1 + r divided by 100) raised to the power of n, giving the equation 2420 equals 2000 multiplied by (1.1) raised to the power of n. Dividing 2420 by 2000 gives 1.21, which equals (1.1) raised to the power of n. Since 1.21 is 1.1 squared, the period n is 2 years.

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