Raj invested an amount of Rs.17400 for two years. Find the rate of compound interest that will fetch him an amount of Rs.1783.50 at the end of two years?
Options:
A . 8% p.a.
B . 6% p.a.
C . 4% p.a.
D . 5% p.a.
E . None of these
Answer: Option D
Let the rate of interest be R% p.a. 17400[1 + R/100]2 = 17400 + 1783.50 [1 + R/100]2 = (17400 + 1783.50)/17400 = 1 + 1025/10000 = 1 + 41/400 = 441/400 = [21/20]2 [1 + R/100] = 21/20 R/100 = 1/20 Therefore R = 5
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