Question

In what time Rs 2000 will become Rs 2420 at 10% per annum compounded annually?
1. 3 years
2. 2 years
3. 1 year
4. 4 years

Answer 1

Correct Answer - Option 2 : 2 years

Given:

The sum of money is Rs. 2000 which becomes Rs. 2420 at 10% per annum

Formula used:

Amount = p × (1 + r/100)ⁿ

Calculation:

Let the time period be t

Amount = p × (1 + r/100)n

⇒ 2420 = 2000 × (1 + 10/100)^t

⇒ 2420/2000 = (11/10)^t

⇒ (121/100) = (11/10)^t

⇒ (11/10) ² = (11/10)^t

⇒ t = 2 years

∴ The time is 2 years.