Question

If the interest is payable quarterly, Rs. $1600$ amounts to Rs. $2662$ after $1\frac{1}{2}$ years, the annual rate of interest is

• A. $5\%$
• B. $10\%$
• C. $20\%$
• D. $35\%$

Answer 1

The correct option is D $35\%$

Amount $=Rs.2662$
Principal $=Rs.1600$
Time $=1.5$ years $=6$ quarters
$A=P{(1+\frac{R}{100})}^T$
$2662=1600{(1+\frac{R}{100})}^6$
$1.088=1+\frac{R}{100}$
$R=8.8\%$
Hence, annual rate of interest $=8.8\times 4=35\%$