What is the rate of interest earned if an investment of Rs. 100,000 grows to Rs. 144,000 in two years, given that interest is earned only on the principal amount?

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To determine the rate of interest earned on an investment of Rs. 100,000 that grows to Rs. 144,000 after two years, we can follow these steps:

  1. Identify the principal amount: The principal (P) is Rs. 100,000.
  2. Identify the final amount: The amount (A) after two years is Rs. 144,000.
  3. Calculate the total interest earned: The interest (I) can be calculated by subtracting the principal from the final amount:

I = A – P

So,

I = Rs. 144,000 – Rs. 100,000 = Rs. 44,000

  1. Calculate the rate of interest: The formula for the rate of interest (R) can be described with the following formula:

Rate (R) = (Interest (I) / Principal (P)) x 100%

Substituting the values we have:

R = (Rs. 44,000 / Rs. 100,000) x 100%

This simplifies to:

R = 0.44 x 100% = 44%

  1. Conclusion: Therefore, the rate of interest earned on the investment over two years is 44% per annum.

This means that the investment grew significantly due to the interest earned on the original principal amount alone.

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