Question : A sum of money invested at compound interest amounts to Rs. 800 in 3 years and to Rs. 840 in 4 years. The rate of interest per annum is:
Option 1: $2\frac{1}{2}$%
Option 2: $4$%
Option 3: $5$%
Option 4: $6\frac{2}{3}$%
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Correct Answer: $5$%
Solution :
Given:
A sum of money invested at compound interest amounts to Rs. 800 in 3 years and to Rs. 840 in 4 years.
So, Simple interest for 1 year = 840 − 800 = Rs.40
Simple interest =$\frac{\text{Principal×Rate×Time}}{100}$
Rate = $\frac{40×100}{800×1}=5$%
Hence, the correct answer is $5$%.
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