📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    A certain amount is split equally between two investment

    plans. One offers simple interest and the other compound interest, both at the same annual rate compounded yearly. After 2 years, the simple interest earned is Rs. 640, and the compound interest is Rs. 688. Find the rate of interest per annum.
    A 15% Correct Answer Incorrect Answer
    B 20% Correct Answer Incorrect Answer
    C 25% Correct Answer Incorrect Answer
    D 45% Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let the amount invested in each scheme be Rs. 'P'. Let the annual interest rate be 'r%' p.a. Simple interest for 2 years = Rs. 640 So, SI per year = 640 ÷ 2 = Rs. 320 Since both interests match in the first year, CI for 1st year = Rs. 320 CI in 2nd year = 688 - 320 = Rs. 368 Now, this extra Rs. 48 is the interest on Rs. 320 for 1 year. 320 × r × 1 / 100 = 368 - 320 = 48 ⇒ r = (48 × 100) ÷ 320 = 15% Hence, Rate of Interest = 15%

    Practice Next
    More Simple and compound interest Questions
    ask-question