Multiple choice

A sum of money invested at C.I. amounts to Rs. 800 in 3 years and to Rs. 840 in 4 years. The rate of interest per annum is

  1. $2\, \displaystyle \frac{1}{2}$%
  2. $4$%
  3. $5$%
  4. $6\, \displaystyle \frac{2}{3}$%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For C.I., A = P(1+r/100)^n. 800 = P(1+r/100)^3 and 840 = P(1+r/100)^4. Dividing: 840/800 = 1+r/100. 1.05 = 1+r/100. r = 5%.

AI explanation

The interest for the fourth year is the difference between the amount after four years and the amount after three years, which is 840 - 800 = 40. The rate of interest is calculated by dividing the fourth year interest by the amount at the end of the third year and multiplying by 100. Thus, Rate = (40 / 800) * 100 = 5%.

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