Multiple choice

Ramesh borrows an amount of money from a moneylender at compound interest. The amount increases to Rs. 7680 in 4 years and to Rs. 7872 in 5 years. The rate of interest is

  1. 12.5%

  2. 2.5%

  3. 15%

  4. 5%

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Interest for the 5th year = 7872 - 7680 = 192. Rate = (192 / 7680) * 100 = 2.5%.

AI explanation

The interest earned in the fifth year is the amount at the end of five years minus the amount at the end of four years, which is 7872 - 7680 = 192. This Rs. 192 is exactly 2.5% of the fourth year's amount of Rs. 7680 (7680 * 0.025 = 192). Therefore, the rate of interest is 2.5%.

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