Question

In what period will Rs 3,200 amount to Rs 3,528 at 5% per annum compounded annually?

• A. $3$ years
• B. $4$ years
• C. $2$ years
• D. $2\frac{1}{2}$ years

Answer 1

The correct option is C $2$ years

$P=3,200;A=3,528;r=5\%;n=?$

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

$3,528=3,200{(1+\frac{5}{100})}^n$

or $\frac{3,528}{3,200}={\left(\frac{105}{100}\right)}^n$

or ${\left(\frac{21}{20}\right)}^2={\left(\frac{21}{20}\right)}^n$

$\therefore n=2$ years.