Multiple choice

A sum of Rs. 300 amounts to Rs. 330.75 in 2 years when compounded annually. Find the rate of interest per annum.

  1. 5% p.a.

  2. 7% p.a.

  3. 9% p.a.

  4. 8% p.a.

  5. 12% p.a.
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A Correct answer
Explanation

330.75 = 300 * (1 + R/100)^2. 1.1025 = (1 + R/100)^2. sqrt(1.1025) = 1.05. R = 5%.

AI explanation

Using the compound interest formula, 330.75 equals 300 multiplied by (1 + r divided by 100) squared. Dividing 330.75 by 300 yields 1.1025, meaning (1 + r divided by 100) squared equals 1.1025. Taking the positive square root gives 1 + r divided by 100 equals 1.05, so the rate of interest is 5% per annum.

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