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Question

A man borrowed Rs.3125 on compound interest which amounted to Rs.4500 in 2 years. What was the rate of interest per annum?


A
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C
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Solution

The correct option is C
Principal (P)=Rs3125
Amount (A)=Rs4500
Time (T)=2yrs
As,
A = P×(1+(R100))T, where R is the Rate of interest p.a.
So, that

AP=(1+(R100))245003125=(1+(R100))21.44=(1+(R100))2(1.2)2=(1+(R100))21.2=1+R1000.2=R100R=20%
Therefore, R=20% p.a


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