Question
At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?
Answer: Option A
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Let the rate be R% p.a.
Then, \(1200\times\left(1+\frac{R}{100}\right)^{2}=1348.32\)
\(\Rightarrow\left(1+\frac{R}{100}\right)^{2}=\frac{134832}{120000}=\frac{11236}{10000}\)
So, \(\left(1+\frac{R}{100}\right)^{2} = \left(\frac{106}{100}\right)^{2}\)
\(1+\frac{R}{100} =\frac{106}{100}\)
R = 6%
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