Question

At what rate percent compound interest per annum will rs. 640 amount to Rs. 774.40 in 2 years?

Answer 1

Principal (P) = Rs. 640
Amount (A) = Rs. 774.40
Rate (R) $=10\%$ p.a
Period (n) = 2 years
Let R be the rate of interest p.a.
$\therefore \frac{A}{P}={(1+\frac{R}{100})}^n$
$\Rightarrow \frac{774.40}{640}={(1+\frac{R}{100})}^2$
$\Rightarrow \frac{77440}{100\times 640}={(1+\frac{R}{100})}^2$
$\Rightarrow \frac{121}{100}={(1+\frac{R}{100})}^2$ (Dividing by 640)
$\Rightarrow {\left(\frac{11}{10}\right)}^2={(1+\frac{R}{100})}^2$
Comparing, we get
$1+\frac{R}{100}=\frac{11}{10}=1+\frac{1}{10}$
$\therefore \frac{R}{100}=\frac{1}{10}\Rightarrow R=\frac{100}{10}=10$
$\therefore$ Rate $=10\%$ p.a