Question

If in two years time a principal of Rs. 100 amounts to Rs. 121, when the interest at the rate of r% is compounded annually, then the value ofr will be

• A. 10.5
• B. 10
• C. 15
• D. 14

Answer 1

The correct option is B 10

Principal=Rs.100

Amount=Rs.121

Time =2 years

Let rate of interest be r%

$\therefore Amount=P{(1+\frac{R}{100})}^t$

$\Rightarrow 121=100{(1+\frac{r}{100})}^t$

$\Rightarrow {(1+\frac{r}{100})}^2=\frac{121}{100}$

$\Rightarrow 1+\frac{r}{100}=\frac{11}{10}$

$\Rightarrow \frac{r}{100}=\frac{11}{10}-1$

$\Rightarrow \frac{r}{100}=\frac{1}{10}$

$\Rightarrow r=\frac{100}{10}\Rightarrow 10$