2 Views

Question : The difference between the compound interest and the simple interest on an amount of INR 1,500 for 2 years, at a given rate of interest per annum, is INR 60. What is the rate of interest per annum, if in the case of compound interest, the interest is compounded annually?

Option 1: 20%

Option 2: 15%

Option 3: 25%

Option 4: 12.5%


Team Careers360 23rd Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 20%


Solution : Given,
Principal Amount = INR 1500
Time = 2 years
The difference between CI and SI = INR 60
Compound Interest – Simple Interest = Principal × $(\frac{R}{100})^2$, where $R$ is the rate of interest.
⇒ CI – SI $= 1500 × (\frac{R}{100})(\frac{R}{100})$
⇒ $(\frac{R}{100})^2 = \frac{60}{1500}$
⇒ $(\frac{R}{100})^2=\frac{1}{25}$
⇒ $R^2 = \frac{1}{25}$ × 100 × 100
⇒ $R^2 = 400$
⇒ $R = \sqrt{400}$
⇒ $R = 20$%
Hence, the correct answer is 20%.

Know More About

Related Questions

TOEFL ® Registrations 2024
Apply
Accepted by more than 11,000 universities in over 150 countries worldwide
Manipal Online M.Com Admissions
Apply
Apply for Online M.Com from Manipal University
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books