Question

In what time Rs.6250 will amount to Rs 6760 at 4% per annum compounded annually.
1. 2 years
2. 3 years
3. 4 years
4. 5 years

Answer 1

Correct Answer - Option 1 : 2 years

Given

Amount = Rs.6760

Rate = 4% per annum

Principal = Rs.6250

Formula used

Amount = Principal (1 + r%)^t

Where r and t are rate and time respectively

Calculation

6760 = 6250 × [ 1 + (4/100)]t

⇒ 6760/6250 = [ 1 + (4/100)]^t

⇒ (26/25)² = (104/100)^t

⇒ (26/25)² = (26/25)^t

⇒ t = 2

∴ Time is 2 years