SBI lent ₹ 1331 lakh to the TATA group at compound interest and got ₹1728 lakh after 3 yr. What is the rate of interest charged, if compounded annually?

Q: SBI lent ₹ 1331 lakh to the TATA group at compound interest and got ₹1728 lakh after 3 yr. What is the rate of interest charged, if compounded annually?

According to the question, 1728 = 1331(1 + R/100)3 1728/1331 = (1 + R/100)3 ⇒ (12/11)3 = (1 + R/100)3 ⇒ 1 + R/100 = 12/11 ⇒ R/100 = (12/11) - 1 = 1/11 ∴ R = 100/11= 9.09%

11%
9.09%
12%
8.33%

Correct Answer: 9.09%

Explanation:

According to the question,
1728 = 1331(1 + R/100)³
1728/1331 = (1 + R/100)³
⇒ (12/11)³ = (1 + R/100)³
⇒ 1 + R/100 = 12/11
⇒ R/100 = (12/11) - 1 = 1/11
∴ R = 100/11= 9.09%

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