Multiple choice

Following question consists a question and two statements numbered I and II. You have to decide whether the data provided in the statements are sufficient to answer the question or not. What is the total compound interest on a sum after two years? (I) The interest after one year is Rs.10 and the sum is Rs. 100. (II) The difference between simple and compound interest on a sum of Rs. 100 at the end of two years is Rs. 1.

  1. Only II

  2. Only I

  3. Both I and II

  4. Any one of the two.

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

From Statement I: Interest after 1 year is Rs.10 on principal Rs.100, so rate = 10%. Compound interest for 2 years at 10% = 100(1.1)² - 100 = Rs.21. From Statement II: For 2 years, difference between CI and SI = P(r/100)² = Rs.1. With P=100, we get 100(r/100)² = 1, giving r = 10%. CI for 2 years = Rs.21. Either statement alone is sufficient.

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