Question

At what rate of interest will a sum of 10,000 become 12,544 in 2 years if the interest is compounded annually

Answer 1

it is given that
Principal(P) = 10,000
Period (T)= 1 year
Sum amount (A)= 11200
Rate of interest =?
(i) We know that
Interest (1)= 11200-10000=1200
So the rate of interest
R= (1×100)/(PxT)
Substituting the values
R= (1200×100¥/(1000×1)
So we get
R= 12% p.a
Therefore, the rate of interest per annum is 12% p.a