Tick the correct answer in each of the following:
At what rate per cent per annum will a sum of Rs 7500 amount to Rs 8427 in 2 years. Compounded annually ?
(a) 4% (b) 5% (c) 6% (d) 8%
Sum (P) = Rs. 7500Amount (A) = 8427Period = 2 yearsLet R be the rate of p.a., then∴ AP=(1+R100)n⇒ 84277500 = (1+R100)2⇒ 28092500=(1+R100)2⇒ (5350)2=(1+R100)2∴ 1+R100=5350⇒ R100=5350−1=350∴ R=350×100=6%