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At what rate of compound interest per annum will a sum of Rs. 1400 become Rs. 1573.04 in 2 years? 
  • a)
    4%
  • b)
    5%
  • c)
    6%
  • d)
    8%
Correct answer is option 'C'. Can you explain this answer?
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At what rate of compound interest per annum will a sum of Rs. 1400 bec...
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At what rate of compound interest per annum will a sum of Rs. 1400 bec...
Solution:

Given, Principal = Rs. 1400, Amount = Rs. 1573.04, Time = 2 years

Let the rate of interest be R% per annum

We know that,

Amount = Principal x (1 + R/100)^n

⇒ 1573.04 = 1400 x (1 + R/100)^2

⇒ (1 + R/100)^2 = 1573.04/1400

⇒ (1 + R/100)^2 = 1.1236

Taking square root on both sides, we get

⇒ 1 + R/100 = 1.06

⇒ R/100 = 0.06

⇒ R = 6%

Hence, the rate of compound interest per annum is 6%.
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At what rate of compound interest per annum will a sum of Rs. 1400 become Rs. 1573.04 in 2 years?a)4%b)5%c)6%d)8%Correct answer is option 'C'. Can you explain this answer?
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