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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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