Question

Find the compound interest approximately rate applied to a principal over $5$ years if the total interest paid equals the borrowed principal.

• A. $14$%
• B. $24$%
• C. $34$%
• D. $7$%

Answer 1

The correct option is A $14$%

We know,

$CI=P(1+\frac{r}{100}{)}^n-P$

$CI=P$ ....... given,

solving the above equations

${(1+\frac{r}{100})}^5=2$

$r=(2^{\frac{1}{5}}-1)\times 100$

$⟹r=14.86\%\approx 14\%$