Question

At what rate percent per annum will a sum of $Rs2000$ amount to $Rs2205$ in $2$ years, compounded annually?

Answer 1

Given Rate of interest is $r$

Principal Amount is $A=2,000$

Time is $t=2$ years

Interest is compounded yearly once $⟹n=1$

Amount $=P(1+\frac{r}{n}{)}^{nt}=2000\times (1+r{)}^2=2205$

$⟹r=0.05=5\%$