Multiple choice

A sum of money invested at compound interest amounts to Rs.650 at the end of the first year and Rs.676 at the end of the second year. What is the rate of interest per annum?

  1. 8%

  2. 5%

  3. 10%

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

The amount at the end of second year equals the first year amount multiplied by (1 + r/100). Setting up 650 × (1 + r/100) = 676 gives 1 + r/100 = 1.04, so r = 4%. Options A, B, and C don't satisfy this equation.

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