Multiple choice

Find the rate percent if the compound interest on Rs. 15,625 for 3 years is Rs. 1,951

  1. 4.5%

  2. 5%

  3. 3%

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

Amount = 15625 + 1951 = 17576. A = P(1 + r/100)^n. 17576 = 15625(1 + r/100)^3. 17576/15625 = (1 + r/100)^3. (26/25)^3 = (1 + r/100)^3. 1 + r/100 = 1.04, so r = 4%.

AI explanation

Using the Compound Interest formula, the total amount is the principal plus the interest, so 15625 plus 1951 equals Rs. 17576. The formula becomes 17576 equals 15625 multiplied by (1 + r divided by 100) cubed. Dividing 17576 by 15625 gives 1.125, and taking the cube root reveals that (1 + r divided by 100) equals 1.04, meaning the rate of interest is 4 percent.

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