Question

Find the rate of interest if $Rs.25,000$ amounts to $Rs.43,200$ in $3$ years, the interest being compounded annually.

Answer 1

Given: $A=Rs.43,200,P=Rs.25,000$ and $T=3$ years

Using formula, $A=P(1+\frac{R}{100}{)}^T$, we get,

$\Rightarrow 43200=25000(1+\frac{R}{100}{)}^3$

$\Rightarrow \frac{43200}{25000}=(1+\frac{R}{100}{)}^3$

$\Rightarrow \frac{216}{125}=(1+\frac{R}{100}{)}^3$

$\Rightarrow (\frac{6}{5}{)}^2=(1+\frac{R}{100}{)}^3$

$\Rightarrow \frac{6}{5}=1+\frac{R}{100}$

$\Rightarrow \frac{1}{5}=\frac{R}{100}$

$\therefore R=20\%$