Multiple choice

The compound interest on a certain sum for $2$ years is $Rs. 40.80$ and the simple interest is $Rs. 40$. Find the rate p.c.?

  1. $Rs. 4$
  2. $4$%
  3. $Rs. 0.80$
  4. $8$%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest for 2 years = 40, so SI for 1 year = 20. Compound interest for 2 years = 40.80. The extra 0.80 is the interest on the first year's interest. Rate = (0.80 / 20) * 100 = 4%.

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