Q90
ArithmeticSimple & Compound Interest
A sum of ₹ 5,000 amounts to ₹ 6,050 after 2 years at compound interest, interest compounded annually. What is the rate of interest per annum?
- a.5%
- b.9%
- c.10%
- d.11%
Answer: (C) 10%
$\frac{6050}{5000} = 1.21 = (1.1)^2$, so $1 + \frac{r}{100} = 1.1$ and r = 10%. 5% would give an amount of only ₹ 5,512·50.