Compound Interest Practice Test 1

Question : 19 of 40

Marks: +1, -0

At what rate will height of a tree become 648.96 cm from 600 cm in a period of 2 years compounded annually?

Solution:

648.96 = 600(1+r/100)^2

{64,896}/{60,000}=(1+r/100)^2

{10,816}/{10,000}=(1+r/100)^2

(104/100)^2=(1+r/100)^2

104/100=1+r/100

4/100=r/100

So, rate of growth = 4%

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