At what rate of interest will Rs. 20000 become Rs. 28800 after 2 year when interest is compounded annually?
1). 5%
2). 6%
3). 20%
4). 15%
P = 20000
A = 28800
T = 2 years
Formula for compound interest,
A = P{1 + R/100}T
⇒ Putting all values in above formula, we get-
⇒ 28800 = 20000{ 1 + R/100}2
⇒ 28800/20000 = {1 + R/100}2
⇒144/100 = {1 + R/100}2
$(\Rightarrow 1 + \frac{{\rm{R}}}{{100}} = \frac{{12}}{{10}})$
⇒ R = 20%