Jameel 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?

A. 8% p.a.
B. 6% p.a.
C. 4% p.a.
D. 5% p.a.
E. None of these

Explanation:

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

Correct Answer: 5% p.a. ✔

Last Updated: February 07, 2020