Multiple choice

Passage

Directions: In the following problem, you have to find out which of the given statements is/are necessary for determining the answer of the question asked.

What is the rate of interest per annum? I. The compound interest in 5 years is more than the amount. II. The difference between simple interest and compound interest for 3 years is Rs. 540. III. An amount double itself simple interest in 5 years.

  1. Only I and II

  2. Only III

  3. Either I and II or III

  4. None of the three statements

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

Statement III says an amount doubles in 5 years at simple interest. SI = P*R*T/100. P = P*R*5/100, so R = 20%. This is sufficient to determine the rate.

AI explanation

To find the rate of interest, we evaluate the sufficiency of the statements to solve the standard interest formulas. Statement I is an invalid statement because compound interest cannot be more than the total amount, making it useless. Statement II provides the difference between simple interest and compound interest for 3 years as Rs. 540, but without the principal sum, the rate cannot be determined. Statement III states the amount doubles itself at simple interest in 5 years, allowing us to find the rate using the formula Rate = 100 / Time = 100 / 5 = 20%, so only III is sufficient.

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