Multiple choice

A sum amounts to Rs. 8000 in 3 years and Rs. 27000 in 6 years when compounded annually. Find the rate of interest.

  1. 30%

  2. 25%

  3. 50%

  4. 40%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P(1+r)^t. 8000 = P(1+r)^3. 27000 = P(1+r)^6. Dividing: 27000/8000 = (1+r)^3 => 3.375 = (1+r)^3. 1+r = cube root of 3.375 = 1.5. r = 0.5 or 50%.

AI explanation

Since the sum amounts to 8000 in 3 years and 27000 in 6 years at compound interest, dividing 27000 by 8000 gives the square of the amount after one more year, which is 3.375. Taking the square root of 3.375 gives 1.5, meaning the principal multiplies by 1.5 each year. The compound interest formula factor is 1 plus R divided by 100, so 1 plus R divided by 100 equals 1.5, resulting in a rate of interest of 50%.

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