Multiple choice

A sum of money put out at compound interest amount in two years to $Rs. 2809$, and in three years to $Rs. 2977.54$. Find the rate per cent

  1. $6$%
  2. $10$%
  3. $4$%
  4. $3$%
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A Correct answer
Explanation

Amount after 2 years = P(1+r)^2 = 2809. Amount after 3 years = P(1+r)^3 = 2977.54. Dividing the two: (1+r) = 2977.54 / 2809 = 1.06. So r = 0.06 or 6%.

AI explanation

The interest earned during the third year is found by subtracting the amount after two years from the amount after three years, which is 2977.54 minus 2809, giving 168.54. This interest is earned on the amount at the end of the second year, so the rate is calculated as 168.54 multiplied by 100 divided by 2809. Solving this gives a rate of 6 percent.

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