Simple and Compound Interest Questions

Multiple choice
  1. $4.6\%$
  2. $4.8\%$
  3. $5.0\%$
  4. $5.2\%$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Since the annual incomes from both parts are equal, the ratio of the investments is inversely proportional to their interest rates, giving P1 : P2 = 6% : 4% = 3 : 2. This means Rs. 2,700 is invested at 4% and Rs. 1,800 at 6%, yielding an annual income of Rs. 108 from each part. The total annual income of Rs. 216 on a total investment of Rs. 4,500 results in an average interest rate of (216 / 4500) * 100 = 4.8%.

Multiple choice
  1. $10\%$
  2. $\displaystyle 10\frac{1}{2}$
  3. $12\%$
  4. $11\%$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For 2 years, SI = 2 * P * R / 100 = 660, so P * R / 100 = 330. CI = P * (1 + R/100)^2 - P = 696.30. P * (2 * R/100 + (R/100)^2) = 696.30. Substituting 330: 2 * 330 + P * (R/100)^2 = 696.30. P * (R/100)^2 = 36.30. (P * R/100) * (R/100) = 36.30. 330 * (R/100) = 36.30. R = 11%.