Multiple choice

Rate of Compound Interest? I: 1000 amounts to 1331. II: Period is 3 years. III: SI one year = CI first year.

  1. I & III sufficient

  2. I & II sufficient

  3. All 3 not sufficient

  4. I & II or III sufficient

  5. All 3 necessary
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Statement I (1000 to 1331) gives the ratio (1.331) for 3 years, allowing calculation of rate. Statement II (3 years) is needed to find the annual rate. Statement III is redundant as it is a property of compound interest.

AI explanation

The compound interest formula is Amount = Principal times (1 + Rate/100) raised to the time period. Using statement I and statement II, we have the equation 1331 = 1000 times (1 + R/100) cubed, which simplifies to (11/10) cubed and gives a rate of 10%. Since these two statements provide the principal, amount and time, they are sufficient to find the rate without needing statement III.

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