A sum of Tk. 8000 will amount to Tk. 8820 in 2 years if the interest is calculated every year. The rate of compound interest is?

Question: A sum of Tk. 8000 will amount to Tk. 8820 in 2 years if the interest is calculated every year. The rate of compound interest is?

Solution:
Principal = Tk. 8000
Amount = Tk. 8820
Let Rate = R
Time = 2 years

By using formula,
8000{1 + (R/100)}² = 8820
⇒ {1 + (R/100)}² = 8820/8000
⇒ {1 + (R/100)}² = 441/200
⇒ {1 + (R/100)}² = (21/20)²
⇒ 1 + (R/100) = 21/20
⇒ R/100 = (21/20) - 1
⇒ R/100 = 1/20
∴ R = 5%