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- List the given numbers and units.
- Choose the formula that matches the asked value.
- Simplify carefully and compare with options.
Correct Answer: A
Correct Answer: A
Method / Topic: Compound Interest
The answer follows from the arithmetic relation between the given values.
Short Explanation
Detailed Explanation
Correct Answer: A
Method / Topic: Compound Interest
<table cellspacing="0" style="border-collapse:collapse; height:20px; width:85px">
<tbody>
<tr>
<td style="border-bottom:1px solid #44b3e1; border-left:none; border-right:none; border-top:1px solid #44b3e1; height:20px; vertical-align:top; white-space:normal; width:85px"><span style="color:#000000">Using A=P(1+r/100)^2, we get 12100=10000(1+r/100)^2. Dividing by 10000 gives 1.21=(1+r/100)^2. Taking the positive square root, 1+r/100=1.10. Therefore, r/100=0.10 and r=10%. The positive root is used because an interest growth factor cannot be negative in this context. A quick check confirms that 10000×1.1×1.1=12100.</span></td>
</tr>
</tbody>
</table>
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Learn + Solve: Shortcut, Trap & Fast Route Click to view shortcut, steps, and common mistake
Shortcut used, common trap, and the fastest solving route
- List the given numbers and units.
- Choose the formula that matches the asked value.
- Simplify carefully and compare with options.
A sum of Rs. 10,000 becomes Rs. 12,100 in 2 years when compounded annually. Find the annual rate.
Explanation
Correct Answer: A
Method / Topic: Compound Interest
The answer follows from the arithmetic relation between the given values.
Short Explanation
Detailed Explanation
Correct Answer: A
Method / Topic: Compound Interest
<table cellspacing="0" style="border-collapse:collapse; height:20px; width:85px">
<tbody>
<tr>
<td style="border-bottom:1px solid #44b3e1; border-left:none; border-right:none; border-top:1px solid #44b3e1; height:20px; vertical-align:top; white-space:normal; width:85px"><span style="color:#000000">Using A=P(1+r/100)^2, we get 12100=10000(1+r/100)^2. Dividing by 10000 gives 1.21=(1+r/100)^2. Taking the positive square root, 1+r/100=1.10. Therefore, r/100=0.10 and r=10%. The positive root is used because an interest growth factor cannot be negative in this context. A quick check confirms that 10000×1.1×1.1=12100.</span></td>
</tr>
</tbody>
</table>
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