Difference between compound interest and simple interest on a sum of Rs. 900 for two years is Rs. 1. Find rate of interest.
Answer & explanation
Correct answer: option 3
Difference between CI and SI for 2 years = P(\(\frac{r}{100}\))²
ATQ,
⇒ P(\(\frac{r}{100}\))² = 1
⇒ 900(\(\frac{r}{100}\))² = 1
⇒ (\(\frac{r}{100}\))² = \(\frac{1}{900}\)
⇒ \(\frac{r}{100}\) = \(\frac{1}{30}\)
⇒ Rate = \(\frac{10}{3}\)% = 3\(\frac{1 }{3}\)%