Question:
Mark (✓) against the correct answer:
At what rate per cent per annum will Rs 5000 amount to Rs 5832 in 2 years, compounded annually?
(a) 11%
(b) 10%
(c) 9%
(d) 8%
Solution:
(d) 8%
Here, $A=$ Rs. $\mathrm{P} \times\left(1+\frac{R}{100}\right)^{n}$
$\Rightarrow$ Rs. $5832=$ Rs. $5000 \times\left(1+\frac{R}{100}\right)^{2}$
$\Rightarrow \frac{\text { Rs. } 5832}{\text { Rs. } 5000}=\left(1+\frac{R}{100}\right)^{2}$
$\Rightarrow\left(\frac{27}{25}\right)^{2}=\left(1+\frac{R}{100}\right)^{2}$
$\Rightarrow 1+\frac{R}{100}=\frac{27}{25}$
$\Rightarrow \frac{R}{100}=\frac{27}{25}-1$
$\quad=\frac{27-25}{25}=\frac{2}{25}$
$\therefore R=\frac{100 \times 2}{25}=8 \%$