Multiple choice

A sum of money compounded annually becomes Rs. 625 in two years and Rs. 675 in three years. The rate of interest per annum is

  1. 7%

  2. 8%

  3. 6%

  4. 5%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount after 2 years = 625, after 3 years = 675. Interest for 1 year = 675 - 625 = 50. Rate = (50 / 625) * 100 = 8%.

AI explanation

The interest earned during the third year is the difference between the amounts, which is 675 minus 625 = Rs. 50. The rate of interest is this interest divided by the amount at the end of two years, multiplied by 100. Thus, the rate is (50/625) x 100 = 8%.

Keep practicing — related questions