Discussion

Question:

At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?

Explanation:

Let the rate be R% p.a.

Then,

$1200 {(1 + \frac{R}{100})}^{2} = 1348.32 {(1 + \frac{R}{100})}^{2} = \frac{134832}{120000} = \frac{11236}{10000} = {(\frac{106}{100})}^{2}$

$1 + \frac{R}{100} = \frac{106}{100}$

∴ R = 6%

Hence, option (a).

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