Multiple choice

The ratio of two year C.I. and one year S.I. of certain sum on certain rate of interest is (2.3 : 1). What is the rate of interest?

  1. 20%

  2. 25%

  3. 10%

  4. 30%

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let the principal be P and rate be r%. SI for 1 year = Pr/100. CI for 2 years = P[(1 + r/100)² - 1]. The ratio [(1 + r/100)² - 1]/(r/100) = 2.3. Solving: (1 + r/100)² - 1 = 2.3r/100, which gives 1 + 2r/100 + r²/10000 - 1 = 2.3r/100, so 2r/100 + r²/10000 = 2.3r/100, leading to r²/10000 = 0.3r/100, thus r = 30. Option D is correct.

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