In how many years will a sum of Rs. 12,000 become Rs. 14,520 at a rate of 10% per annum on compound interest, compounded annually? 

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RRB Technician Grade III Official Paper (Held On: 29 Dec, 2024 Shift 1)
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  1. 2
  2. 5
  3. 3
  4. 4

Answer (Detailed Solution Below)

Option 1 : 2
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Detailed Solution

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Given:

Principal (P) = ₹12,000

Amount (A) = ₹14,520

Rate (r) = 10% per annum

Formula used:

A = P(1 + \(\frac{r}{100}\))t

Calculations:

14,520 = 12,000(1 + \(\frac{10}{100}\))t

\(\frac{14,520}{12,000}\) = (1 + \(\frac{10}{100}\))t

⇒ 1.21 = (1.1)t

⇒ 1.12 = (1.1)t

⇒ t = 2

∴ The correct answer is option (1).

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