Question

If the compound interest on a principal for one year is Rs. 200 and the compound interest for 2nd year is Rs. 240. Find the rate of interest.

• A. 5%
• B. 10%
• C. 15%
• D. 20%

Answer 1

Answer:

D. 20%

The difference between the interest of 2nd and 1st year = 240 - 200 ⇒ Rs. 40 The interest on Rs. 200 for 1 year is Rs. 40 (200 × R × 1)/100 = 40 [ For 1 year simple interest and compound interest are same] ⇒ 200 × R = 40 × 100 ⇒ R = 20%