Question

Q. Ram deposits Rs 500, which amount to Rs 583.20 in two years compounded annually, find the rate of interest

• A. 5%
• B. 6%
• C. 7%
• D. 8%
• E. None of these

Answer 1

The correct option is D 8%

For rate of interest = x
Total amount $=583.20=500\times (1+\frac{x}{100}{)}^2$
$(1+\frac{x}{100}{)}^2=\frac{5832}{5000}=\frac{11664}{10000}$
$1+\frac{x}{100}=\frac{108}{100}$
x = 8%