Practicing Success
On a sum of money, when invested for 2 years, compound interest and simple interest are ₹300 and ₹250, respectively. For both simple and compound interests the rate of interest per annum is the same, and for compound interest, interest is compounded annually. Find the rate of interest per annum. |
10% 20% 40% 30% |
40% |
Simple interest of 2 years = Rs. 250 Compound interest of 2 years = Rs. 300 Difference b/w CI and SI of 2 years = 300 - 250 = 50 Simple interest of 2 years = \(\frac{250}{2}\) = Rs. 125 Rate of interest = \(\frac{50}{125}\) × 100% = 40% |