If the compound interest on a principal for one year is ₹350 and the compound interest for the second year is ₹420, find the rate of interest.
Answer & explanation
Correct answer: option 2
Difference in interest of 2nd and 3rd year = 420 - 350 = Rs. 70
Rate of interest = \(\frac{70}{350}\) × 100%
= \(\frac{1}{5}\) × 100%
= 20%