Multiple choice

Find the approximate rate of Compound Interest at which Rs. $1000$ becomes Rs. $5000$ in $4$ years.

  1. $10\%$
  2. $15\%$
  3. $50\%$
  4. $30\%$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P(1 + r/100)^n. 5000 = 1000(1 + r/100)^4. 5 = (1 + r/100)^4. 5^(1/4) = 1 + r/100. 5^(0.25) is approximately 1.495. So r/100 = 0.495, r = 49.5%, which is approximately 50%.

AI explanation

Using the compound interest formula, 5000 = 1000(1 + r/100)^4, which simplifies to (1 + r/100)^4 = 5. Taking the fourth root of both sides gives 1 + r/100 = 1.495, meaning r/100 equals 0.495. Multiplying by 100 yields an approximate rate of 50%.

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