Correct Answer - Option 1 : 7%
Given:
Principal = ₹ 1,000
Time = 2 years
Amount = ₹ 1,144.90
Formula used:
A = P{1 + (R/100)}n
Where,
A = Amount
R = Rate
n = Time
P = Principal
Calculations:
A = P{1 + (R/100)}n
⇒ 1,144.90 = 1,000 × {1 + (R/100)}2
⇒ 1,14490/1,000,00 = {1 + (R/100)}2
⇒ {1 + (R/100)} = √(11449/10000)
⇒ 1 + R/100 = 107/100
⇒ R/100 = 7/100
⇒ R = 7%
∴ At 7% the interest is compounded annually.
