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Question

If Rs. 500 amounts to Rs. 583.20 in two years compounded annually, find the rate of interest per annum.


  1. (10\%\)


Solution

The correct option is B


Principal = Rs.500; Amount = Rs. 583.20; Time = 2 years.
Let the rate be R% per annum. Then,
[500(1+R100)2] = 583.20 or (1+R100)2 = 5832050000 = 1166410000
 (1+R100)2 = (108100)2 or 1+R100 = 108100 or R=8.
So, rate = 8% p.a.

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