Multiple choice

Ramesh lends Rs. 15,000 for 2 years at a certain rate of compound interest. If after 2 years, it amounts to Rs. 16,224; find the rate of interest.

  1. 2%

  2. 4%

  3. 6%

  4. 8%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the compound interest formula A = P(1 + r/100)^n, 16224 = 15000(1 + r/100)^2. Dividing by 15000 gives 1.0816 = (1 + r/100)^2. Taking the square root, 1.04 = 1 + r/100, so r = 4%.

AI explanation

Using the compound interest formula where amount equals principal times the quantity 1 plus rate divided by 100 raised to the time, we set up 16224 equals 15000 times the quantity 1 plus R divided by 100 squared. This simplifies to 16224 divided by 15000, equaling 1.0816, and taking the square root of both sides gives 1 plus R divided by 100 equaling 1.04. Solving for R gives 0.04, which results in a 4% rate of interest.

Keep practicing — related questions