Q. At what rate per cent per annum will a sum of 1000 Rs. amounts to 1102.50 Rs. in 2 years at compound interest?
Answer: 5%
Notes: $latex A = P(1 + \frac{R}{100})^{T}&s=1$ Let rate be 'r' $latex => \frac{1102.50}{1000} = (1 + \frac{r}{100})^{2}&s=1$ $latex => \frac{11025}{10000} = (1 + \frac{r}{100})^{2}&s=1$ $latex => (\frac{105}{100})^{2} = (1 + \frac{r}{100})^{2}&s=1$ $latex => 1 + \frac{r}{100} = \frac{105}{100}&s=1$ $latex => \frac{r}{100} = \frac{5}{100}&s=1$ $latex => r = 5\%&s=1$ Hence option [A] is correct answer.

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