On compound interest, a certain sum amounts to ₹7350 in 2 years and to ₹8575 in 3 years. Find the rate of interest.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → \(\frac{50}{3}\)%
Under compound interest the amount after 3 years is the amount after 2 years plus one year’s interest on it. So the third year’s interest, taken as a percentage of the 2-year amount, is the rate.
Interest for the third year \(=8575-7350=1225\)
Rate \(\displaystyle =\frac{1225}{7350}\times100=\frac{1}{6}\times100=\frac{50}{3}\%\)