Multiple choice

In each of the following questions, a question is followed by two or three statement. Read all the statements and find that which statements are required to answer the question and answer accordingly. What is the rate of interest p.c.p.a? Statement I: Simple Interest accrued in two years on the same amount at the same rate of interest is Rs. 44,000. Statement II: The amount becomes Rs. 15,400 in two years on simple interest. Statement III: Difference between the compound interest and simple interest earned in two years on the amount invested is Rs. 120.

  1. Only I and II

  2. Only II and III

  3. Only II

  4. Only I and III

  5. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let P = principal, R = rate. From I: SI for 2 years = 44,000, so P×R×2/100 = 44,000, hence PR = 2,200,000. From III: CI - SI for 2 years = 120. For 2 years, CI-SI = P(R/100)². So P(R/100)² = 120, giving PR²/10,000 = 120, hence PR² = 1,200,000. Dividing PR² by PR gives R = 1,200,000/2,200,000 = 6/11 ≈ 5.45%. Thus I and III are sufficient.

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