At what annual rate of compound interest will Rs. 1200 amount to Rs. 1348.32 in 2 years?

Problem restatement
Find r such that 1200(1 + r)² = 1348.32.

Given data

• P = 1200; A = 1348.32; t = 2 years

Concept/Approach
Solve for r from (1 + r)² = A÷P.

Step-by-step calculation
(1 + r)² = 1348.32 ÷ 1200 = 1.12361 + r = √1.1236 = 1.06r = 0.06 = 6% p.a.

Common pitfalls
Taking r = 12.36% (the two-year growth) without extracting the square root.