Multiple choice

At what rate percent per annum will a sum of Rs. $1000$ amount to Rs. $1102.50$ in $2$ years at compound interest?

  1. $2$%
  2. $3$%
  3. $4$%
  4. $5$%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Using A = P(1 + r/100)^n, 1102.50 = 1000(1 + r/100)^2. (1 + r/100)^2 = 1.1025. 1 + r/100 = sqrt(1.1025) = 1.05. r = 5%.

AI explanation

Using the compound interest formula A = P(1 + R/100)^n, substitute the given values to get 1102.50 = 1000(1 + R/100)^2. This simplifies to (1 + R/100)^2 = 1.10250. Taking the square root gives 1 + R/100 = 1.05, so R/100 = 0.05 and R = 5. The required rate is 5%.

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