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      Question

      Simple interest and compound interest (compounded

      annually) earned on a sum at the end of 2 years at a certain rate of interest p.a. are Rs. 2500 and Rs. 2750 respectively. Find the rate of interest.
      A 20% Correct Answer Incorrect Answer
      B 25% Correct Answer Incorrect Answer
      C 23% Correct Answer Incorrect Answer
      D 10% Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      Simple interest for 1 year = 2500/2 = Rs. 1250 Difference between compound Interest and Simple Interest for 2 years = 2750 - 2500 = Rs. 250 Desired rate = 250/1250 x 100 = 20%

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