At what rate percent compound interest on a sum of money becomes 1.4 times of itself in 2 years?

Join NOW to get access to exclusive study material for best results

At what rate per cent compound interest, does a sum of money become 1.44 times of itself in 2 years ?

Open in App

At what rate per cent compound interest, does a sum of money become 1.44 times of itself in 2 years ?

Let Principal = Rs. yThen Amount= Rs 1.44y

n= 2 years

∴ Amount = `"P"( 1 + "r"/100 )^n`

⇒ 1.44y  = `y( 1 + r/100)^2`

⇒ `[1.44y]/y = ( 1 + r/100)^2`

⇒ `36/25 = ( 1 + r/100)^2`

⇒ `( 6/5 )^2 = ( 1 + r/100)^2`

On comparing,
`6/5 = 1 + r/100`

On solving, we get
 r = 20 % 

Concept: Concept of Compound Interest - Inverse Formula

  Is there an error in this question or solution?