Multiple choice

Jenny invested a certain sum of money in a scheme for two years. She receives compound interest of Rs. 756 and simple interest of Rs. 720. What will be the rate of interest, if the sum is invested in such a way that simple interest becomes Rs. 900 and the total number of years becomes equal to rate percent per annum?

  1. 8

  2. 9

  3. 3

  4. 5

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

For 2 years, SI = 720 implies SI for 1 year = 360. CI - SI = 756 - 720 = 36, which is the interest on the first year's interest. Thus, 36/360 = 10% rate. Using SI = P*R*T/100, 360 = P*0.10*1, so P = 3600. For the second part, SI = 900, P = 3600, and T = R. 900 = 3600 * R * R / 100, so R^2 = 25, R = 5.

Keep practicing — related questions