Question:
At what rate of interest per annum compounded annually will a sum of money become 81 times in 4 years?
At what rate of interest per annum compounded annually will a sum of money become 81 times in 4 years?
Updated On: Mar 4, 2025
- 50%
- 100%
- 150%
- 200%
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The Correct Option is D
Solution and Explanation
Calculating the Rate of Interest Using Compound Interest Formula
Formula for Compound Interest:
A = P (1 + r / 100)ᵗ
Given Information:
- Final Amount (A) = 81P
- Principal (P)
- Time (t) = 4 years
Step-by-Step Calculation:
81P = P (1 + r / 100)⁴
Canceling P from both sides:
81 = (1 + r / 100)⁴
Taking the fourth root:
∜81 = 1 + r / 100
3 = 1 + r / 100
Solving for r:
r / 100 = 2
r = 200%
Final Answer:
Thus, the correct answer is 200% (Option D).
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