Multiple choice

The simple interest and compound interest on a sum of money for 2 years are Rs. 1800 and Rs. 1890 respectively. So, at what interest rate was that sum kept?

  1. 10 %

  2. 1%

  3. 12%

  4. 15%
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A Correct answer
Explanation

SI for 2 years = 1800, so SI for 1 year = 900. CI for 2 years = 1890. The difference between CI and SI for 2 years is the interest on the first year's interest: 1890 - 1800 = 90. Rate = (90 / 900) * 100 = 10%.

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