Multiple choice

At what percentage rate per annum will a sum of Rs. 1,000 amount to Rs. 1,102.50 in 2 years at compound interest?

  1. 5%

  2. 5.5%

  3. 6%

  4. 6.5%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Amount = P(1 + R/100)^n. 1102.5 = 1000(1 + R/100)^2. 1.1025 = (1 + R/100)^2. sqrt(1.1025) = 1.05. 1 + R/100 = 1.05 => R = 5%.

AI explanation

Using the compound interest formula A = P * (1 + R / 100)^T, we have 1102.50 = 1000 * (1 + R / 100)^2. Solving for the rate gives (1 + R / 100)^2 = 1.1025. Taking the square root gives 1 + R / 100 = 1.05, so R = 5%.

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