Multiple choice

Sonika invested an amount of Rs 5800 for 2 years. At what rate of compound interest will she get an amount of Rs.594.50 at the end of two years?

  1. 5%

  2. 10%

  3. 8%

  4. 3.5%

  5. none
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A Correct answer
AI explanation

Using the compound interest formula CI = P * ((1 + R / 100)^T - 1), we substitute the given values to get 594.50 = 5800 * ((1 + R / 100)^2 - 1). This simplifies to 0.1025 = (1 + R / 100)^2 - 1, which means (1 + R / 100)^2 = 1.1025. Taking the square root of both sides gives 1 + R / 100 = 1.05, so the rate of interest is 5%.

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