At what rate of interest will be Rs 20000 becomes Rs 24200 after 2 years when interest is compounded annually?
A. 5%
B. 6%
C. 10%
D. 15%
Explanation:
P = Rs 20000, A =Rs 24200,
t = 2 years 20000 × (1 + R/100)2 = 24200
=> (1 + R/100)2 = 24200/20000 = 121/100 = (11/10) 2
=> 1 + R/100 = 11/10
=> R/100 = (11/10 – 1) = 1/10
=> R = (100 × 1/10) % p.a = 10 % p.a
Hence, Rate = 10 % p.a