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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. 4500 and Rs. 5400 respectively. Find the rate of interest.
    A 30% Correct Answer Incorrect Answer
    B 25% Correct Answer Incorrect Answer
    C 23% Correct Answer Incorrect Answer
    D 40% Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Simple interest for 1 year = 4500/2 = Rs. 2250 Difference between compound Interest and Simple Interest for 2 years = 5400 – 4500 = Rs. 900 Desired rate = 900/2250 × 100 = 40%

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