Question

An amount was invested at r% per quarter. What value of r will ensure that accumulated amount at the end of one year is 1.5 times more than amount invested? Correct to 2 decimal places

Answer 1

25.75 % interest rate

Explanation:

Given:

Amount was invested = r% per quarter

Amount invested = P

Rate of interest = r % per quarter

Time (n) = 4 Quarters

Computation:

A = P(1 + r/100)ⁿ

According to question.

⇒ A = P + 1.5P = 2.5P

⇒ 2.5P = P(1 + r/100)⁴

⇒ 2.5 = (1 + r/100)⁴

⇒ 1 + r/100 = 1.2575

⇒ r/100 = 0.2575

⇒ r = 25.75

25.75 % interest rate