A person deposited ₹100 in a bank, and after 2 years received ₹121 as the total amount under compound interest. What is the annual percentage rate of compound interest?

Q.A person deposited ₹100 in a bank, and after 2 years received ₹121 as the total amount under compound interest. What is the annual percentage rate of compound interest?

Let the annual compound interest rate be \(r\%\). \[ \therefore\ 100(1 + \frac{r}{100})^2 = 121 \] Or, \[ (1 + \frac{r}{100})^2 = \frac{121}{100} \] Or, \[ 1 + \frac{r}{100} = \frac{11}{10} \] Or, \[ \frac{r}{100} = \frac{11}{10} - 1 = \frac{1}{10} \] So, \[ r = 10 \] \(\therefore\) The annual compound interest rate is 10%.