Sanjay invested an amount of Rs 16,000 for two years on compound interest and…

2025

Sanjay 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 per annum ?

  1. A.

    4%

  2. B.

    5%

  3. C.

    8%

  4. D.

    Data Inadequate

Attempted by 29 students.

Show answer & explanation

Correct answer: B

Solution:

Use the compound interest formula: Amount = Principal × (1 + r/100)^n

  1. Substitute the given values: 17640 = 16000 × (1 + r/100)^2

  2. Divide both sides by 16000: (1 + r/100)^2 = 17640/16000 = 441/400 = (21/20)^2

  3. Take the positive square root: 1 + r/100 = 21/20 = 1.05

  4. Therefore r/100 = 0.05, so r = 5%

Answer: 5%

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