Rs. 156.25 amounts to Rs. 297.91 in 3 years at k% p.a. compounded annually. The value of k is
1. 18%
2. 24%
3. 25%
4. 12%
1. 18%
2. 24%
3. 25%
4. 12%
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Correct Answer – Option 2 : 24%
Given:
Amount (A) = Rs. 297.91
Principal (P) = Rs. 156.25
Rate (R) = k%
Time (n) = 3 years
Formula used:
A = P(1 + R/100)n
Where A → amount
P → principal
R → rate
n → time
Calculations:
A = P(1 + R/100)n
⇒ 297.91 = 156.25(1 + R/100)3
⇒ (1 + R/100)3 = 297.91/156.25
⇒ (1 + R/100)3 = (31/25)3
⇒ (1 + R/100) = 31/25
⇒ (R/100) = 6/25
⇒ R = 24%
∴ The value of k is 24%.