Question

Seema invested an amount of Rs. 16,000 for two years on compound interest and received an amount of Rs. 17,640 on maturity. What is the rate of interest ?

• A. 5 pcpa
• B. 8 pcpa
• C. 4 pcpa
• D. Data inadequate

Answer 1

Answer: (A)

5 pcpa

Answer 2

The formula for Amount(A) is
Amount (A) = (P) Principal $\times[1-\frac{r}{100}]^n$

Now putting the values given in the question to the equation, we get

17640 = 16000$\times[1-\frac{r}{100}]^2$

On solving the equation, we get
$r=$ 0.05 = 5$\%$
So, the Rate of interest = 5$\%$ per annum
The correct option is (A)