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Question
At what rate percent will a sum of Rs. 4,000 yield Rs.1,324 as compound interest in 3 years?
Solution
Given : P = Rs. 4,000, C.I. = Rs. 1,324 and n = 3 years
Now, A = P + I
⇒ A = Rs. ( 4,000 + 1,324 ) = Rs. 5,324
`A = P( 1 + r/100)^3`
⇒ `5324 = 4000( 1 + r/100)^3`
⇒ `5324/4000 = ( 1 + r/100)^3`
⇒ `1331/1000 = ( 1 + r/100)^3`
⇒ `( 1 + R/100)^3 = 1331/1000 = (11/10)^3`
⇒ 1 + `r/100 = 11/10`
⇒ `r/100 = 11/10 - 1 = 1/10`
⇒ `r = 100/10 = 10%`
Thus, the rate of interest is 10%.
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