If difference between compound interest and simple interest on a sum of Rs.400 for two years is Rs.9, then find the rate of interest.
Answer & explanation
Correct answer: option 2
If rate of Interest x% [= \(\frac{a}{b}\) × 100] ,then for 2 years difference:
⇒ \(\frac{Difference}{Principal}\) = \(\frac{a^2}{b^2}\)
ATQ,
⇒ a2 = 9 and b2 = 400
⇒ a = 3 and b = 20
⇒ Rate of interest = x% = \(\frac{3}{20}\) × 100 = 15%