Multiple choice

Rohit invested an amount of money in a saving scheme. The amount increased to Rs. 30,720 after 3 years and to Rs. 43,740 after 6 years on compound interest. What was the rate of interest?

  1. 11.5%

  2. 12.5%

  3. 13.5%

  4. 14.5%

  5. 15.5%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount after 3 years A3 = P(1+r)^3 = 30720. Amount after 6 years A6 = P(1+r)^6 = 43740. (1+r)^3 = 43740 / 30720 = 1.4234. 1+r = cube root of 1.4234 = 1.125. Rate = 12.5%.

AI explanation

Since the amount becomes 30720 in 3 years, the amount after another 3 years (total 6 years) is 30720 multiplied by the growth factor for 3 years, which equals 43740. The growth factor for 3 years is 43740 / 30720 = 1.423828125, so the amount after 3 years equals the principal multiplied by 1.423828125. Checking the options, (1.125)^3 = 1.423828125, meaning the rate of interest is 12.5%.

Keep practicing — related questions