Question

The Difference between the Simple Interest and Compound interest earned on sum of Rs. 7680 in two years is Rs. 307.2, then Find the Rate of interest.
1. 10%
2. 22%
3. 16%
4. 20%

Answer 1

Correct Answer - Option 4 : 20%

Given:

Difference between Simple interest and Compound interest = Rs. 307.2

Principal (P) = Rs. 7680

Formula Used:

Difference = P(Rate/100)²

Calculation:

307.2 = 7680(Rate/100)²

⇒ (307.2/7680) = (Rate/100)²

⇒ (1/25) = (Rate/100)²

Taking Square root both sides

⇒ (1/5) = (Rate/100)

⇒ Rate = 100/5 = 20%

∴ The Rate percent incurred per annum is 20%