Multiple choice

A sum of Rs. 6400 earns a compound interest of Rs. 2118.4 in 18 months, when the interest is reckoned half yearly. Find the rate of interest.

  1. 20%

  2. 15%

  3. 10%

  4. 25%

  5. 30%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 6400, Amount = 6400 + 2118.4 = 8518.4. Time = 18 months = 3 half-years. A = P(1 + r/100)^n. 8518.4/6400 = (1 + r/100)^3. 1.331 = (1 + r/100)^3. 1.1 = 1 + r/100. r = 10%.

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