Question

Rajeev borrowed Rs 1200 from the SBI bank then In what time it would amount to Rs.1323 at 5% compound interest?
1. 2 years 
2. 3 years 
3. 4 years 
4. 5 years 
5. None of these

Answer 1

Correct Answer - Option 1 : 2 years 

Given 

Principal = Rs 1200

Rate of interest = 5% 

Formula used 

A = P (1 + r/100)^t

Calculation 

A = P (1 + r/100)t

⇒ 1323 = 1200 (1 + 5/100)^t

⇒1323/1200 = (21/20)^t

⇒ (21/20)^t  = (21/20)²

⇒ t = 2 years.

∴ The time is 2 years