Question

At what rate of compound interest per annum will a sum of ₹1200 become ₹1348.32 in 2 years?

Options

• 6%

• 6.5%

• 7%

• 7.5%

Answer 1

6%
Explanation:
Let the rate be r % per annum.

Then, `1200xx(1+r/100)^2=1348.32`

⇒`(1+r/100)^2=134832/120000=11236/10000`

⇒`(1+r/100)^2=(106/100)^2`

⇒ `1+r/100=106/100`

⇒ r = 6%