Multiple choice

An amount at certain rate of compound interest becomes Rs. 700 in 3 years and Rs. 756 in 4 years. Rate of interest is:

  1. $7%$
  2. $10%$
  3. $8%$
  4. $10.5%$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest for 1 year = 756 - 700 = 56. Rate = (Interest / Principal) * 100 = (56 / 700) * 100 = 8%.

AI explanation

The amount at the end of 4 years represents the principal plus one year of interest on the amount at the end of 3 years, so 756 = 700 times (1 plus Rate divided by 100). Solving this gives 1 plus Rate divided by 100 = 756 divided by 700, which simplifies to 1.08. Subtracting 1 gives the rate of interest as 8 percent.

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