Multiple choice

If a sum amounts to Rs. 2190 in four years and Rs. 2409 in five years at compound interest, when the interest is compounded yearly, then the annual rate of interest is:

  1. 8%

  2. 10%

  3. 9%

  4. 11%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Interest for 1 year = 2409 - 2190 = 219. Rate = (219 / 2190) * 100 = 10%.

AI explanation

The compound interest earned during the fifth year is the difference between the amounts after five and four years, which is 2409 minus 2190 equal to 219. This interest of 219 is earned on the amount at the end of the fourth year, meaning the rate of interest is 219 divided by 2190 multiplied by 100. Calculating this gives an annual interest rate of 10%.

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