Multiple choice

A sum lent at CI amounts in 2 years to Rs. 578.40 and in 3 years to Rs. 614.55. Find the rate of interest.

  1. $5$ %
  2. $6 \displaystyle \frac{1}{4} \%$
  3. $7$ %
  4. $12 \displaystyle \frac{1}{2} \%$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A2 = P(1+r)^2 = 578.40, A3 = P(1+r)^3 = 614.55. (1+r) = 614.55 / 578.40 = 1.0625. r = 0.0625 = 6.25% = 6 1/4%.

AI explanation

The difference between the 3-year amount and the 2-year amount represents the compound interest earned in the third year, which is Rs. 614.55 minus Rs. 578.40, equaling Rs. 36.15. This interest is generated by the amount at the end of the second year, Rs. 578.40, so the rate is calculated as (36.15 / 578.40) x 100. Simplifying this fraction gives 6.25 percent, which is 6 and 1/4 percent.

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