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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. 1300 and Rs. 1430 respectively. Find the rate of interest.
    A 20% Correct Answer Incorrect Answer
    B 21% Correct Answer Incorrect Answer
    C 25% Correct Answer Incorrect Answer
    D 10% Correct Answer Incorrect Answer

    Solution

    Simple interest for 1 year = 1300/2 = Rs. 650 Difference between compound Interest and Simple Interest for 2 years = 1430 ; 1300 = Rs. 130 Desired rate = 130/650 times; 100 = 20%

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