At what rate percent will ₹ 2000 amount to ₹ 2315.25 in 3 years at compound interest?
Solution:
It is given that
Principal (P) = ₹ 2000
Amount (A) = ₹ 2315.25
Period (n) = 3 years
Consider r% p.a. as the rate of interest
We know that
A/P = (1 + r/100)n
Substituting the values
2315.25/2000 = (1 + r/100)3
By further calculation
(1 + r/100)3 = 231525/(100 × 2000) = 9261/8000 = (21/20)3
So we get
1 + r/100 = 21/20
It can be written as
r/100 = 21/20 – 1 = 1/20
r = 100/20 = 5
Hence, the rate of interest is 5% p.a.
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