Rs. 50,000 yields a compound interest of Rs. 11,605 at 11% per annum. The period (in years) is:
1. 2 years
2. 3 years
3. 4 years
4. 2(1/2) years
1. 2 years
2. 3 years
3. 4 years
4. 2(1/2) years
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Correct Answer – Option 1 : 2 years
Given:
Principal (P) = Rs.50,000
C.I. = Rs.11,605
Rate (R) = 11%
Formula used:
A = P(1 + R/100)n
Where A → amount
P → principal
R → rate
n → time
Calculations:
Amount = 50000 + 11605 = Rs. 61,605
A = P(1 + R/100)n
⇒ 61605 = 50000(1 + 11/100)n
⇒ (111/100)n = 61605/50000
⇒ (111/100)n = 12321/10000
⇒ (111/100)n = (111/100)2
⇒ n = 2
∴ The time period is 2 years.