At what interest rate compounded annually will an amount of Rs 625 give an interest of Rs 51 in 2 years?

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Solution

The correct option is B 4%
Amount = Principal + Interest = Rs 676
Also, $A = P [1 + \frac{r}{100}]^{n}$
$\Rightarrow 676 = 625 [1 + \frac{r}{100}]^{2}$
$\Rightarrow \frac{676}{625} = [1 + \frac{r}{100}]^{2}$
$\Rightarrow \frac{26}{25} = 1 + \frac{r}{100}$
$\Rightarrow r = 4$

Thus, rate of interest = 4%.

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At what interest rate compounded annually will an amount of Rs 625 give an interest of Rs 51 in 2 years?

The correct option is B 4%Amount = Principal + Interest = Rs 676 Also, A=P[1+r100]n ⇒676=625[1+r100]2 ⇒676625=[1+r100]2 ⇒2625=1+r100 ⇒r=4 Thus, rate of interest = 4%.