Question

At what rate per cent per annum compound interest will Rs. 4000 amount to Rs. 5324 in 3 years

Answer 1

Given that principal,p = Rs.4000

Amount, A = Rs. 5324

let the rate of interest = r%.

Given time,n = 3 years.

Then from equation of compound interest, we know

A = p×(1 + r/100)n

5324 = 4000(1 + r/100)3

5324/4000 = (1 + r/100)3

1331/1000 = (1 + r/100)3 [ cube root on both sides]

(11 / 10)3 = (1 + r/100)3

11 / 10 = 1 + r / 100

(11 / 10)-1 = r / 100.

1 / 10 = r / 100

r = 100/10

∴ r =10%.

Hence the rate of interest is 10%.