At 5% per annum compound interest, Rs. 800 will grow to Rs. 882 in________?
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Answer: B. 2 years
Explanation
The correct answer is two years for the investment to grow to eight hundred eighty-two. Using the compound interest formula with principal eight hundred and amount eight hundred eighty-two. Solving the exponential equation yields a time period of two years. Compound interest formula is amount equals principal multiplied by one plus rate raised to time. Dividing eight hundred eighty-two by eight hundred gives one hundred ten twenty-fifths. The square root of one hundred ten twenty-fifths equals one and five-hundredths.
Compound interest calculations are vital for savings accounts, loans, and investment planning. Banking institutions use exponential formulas to compute interest accrual over time. Personal finance management requires understanding how money grows with compound rates. Option A underestimates the growth time because one year yields less than eighty-two rupees interest. Option C overestimates the time since compound interest accumulates faster than simple interest. Option D results in an amount far exceeding eight hundred eighty-two rupees.
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