At what rate of compound interest a sum of money becomes 1.69 times in 2 years?

Q:

The compound interest on a certain sum of money at 21% for 2 years is ₹9,282. Its simple interest (in ₹) at the same rate and for the same period is:

Answer & Explanation Answer: B) 8,400

Explanation:

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Q:

₹4,000 is given at 5% per annum for one year and interest is compounded half yearly. ₹2,000 is given at 40% per annum compounded quarterly for 1 year. The total interest received is nearest to:

Answer & Explanation Answer: C) ₹1,130.70

Explanation:

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Q:

A sum amounts to ₹18,600 after 3 years and to ₹27,900 after 6 years, at a certain rate percent p.a., when the interest is compounded annually. The sum is:

Answer & Explanation Answer: B) Rs. 12,400  

Explanation:

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Find the rate of compound interest at which a principal becomes 1.69 times itself in 2 years

Let principal be ‘P’

Amount is given to be 1.69 times principal

i.e 1.69 P

Time period is 2 years. = (n)

Rate of interest = r = ? ...(required)

Applying the formula,

Amount = `"Principal" (1 + "r"/100)^"n"`

Substituting 1.69 P = `"P"(1 + "r"/100)^2`

∴ `(1 + "r"/100)^2 = (1.69"P")/"P"` = 1.69

Taking square root on both sides, we get

`sqrt(1.69) = 1 + "r"/100`

∴ `1 + "r"/100` = 1.3

∴ `"r"/100` = 1.3

r = 30%

∴ rate of compound interest is 30%

Concept: Concept of Compound Interest

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