Multiple choice

Ram takes a loan of Rs. 10,000 and pays back Rs. 13,000 after 3 years. The compound interest rate per annum will approximately be

  1. 8%

  2. 9%

  3. 10%

  4. 11%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the compound interest formula A = P(1 + r/100)^n, 13000 = 10000(1 + r/100)^3. 1.3 = (1 + r/100)^3. Taking the cube root, 1 + r/100 is approximately 1.091. Thus, r is approximately 9%.

AI explanation

The total compound interest paid is 13000 - 10000 = 3000 over 3 years. Using the formula Amount = Principal(1 + R/100)^n, we get 13000 = 10000(1 + R/100)^3, which simplifies to (1 + R/100)^3 = 1.3. Taking the cube root gives 1 + R/100 = 1.0914, meaning the rate is approximately 9 percent. The result is 9 percent.

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