Question

The difference between the compound interest on a sum of Rs 4000, interest being compounded annually and the simple interest on it for two years is Rs 250. Find the rate of interest. (per annum)
A. 0.15
B. 0.1
C. 0.25
D. 0.2

Answer 1

Correct Answer - C
i) Let the rate of interest be `r%`.
ii) `4000[(1+r/100)^(2)-1]-(4000 xx r xx 2)/100=250`.
iii) Solve the above to find r.