If ₹40000 amounts to ₹48620.25 in 2 years, compound interest payable half-yearly, find the rate of interest per annum.

Let rate of interest per annum be r% per annum, i.e. % half-yearly. n = 2 years or 4 half-years. A = Given, A = ₹48620.25 and P = ₹40000. Putting values in formula we get, Hence, rate of interest = 10% per annum.