Answer :
The rate percent per annum compound interest is 4%.
To find the compound interest rate, we use the compound interest formula:
A = [tex]P(1 + r/n)^n^t[/tex]
Given: A = 3380, P = 3125, t = 2 years, and n = 1 (compounded annually)
Rearranging the formula to solve for r:
- A = [tex]P(1 + r)^t[/tex]
3380 = 3125[tex](1 + r)^2[/tex]
Dividing both sides by 3125:
1.0816 = [tex](1 + r)^2[/tex]
Taking the square root of both sides:
√1.0816 = 1 + r
1.04 = 1 + r
Subtracting 1 from both sides:
r = 0.04 or 4%
Therefore, the rate percent per annum is 4%.
