Question

The compound interest on a certain sum for 2 years is Rs. 756 and simple interest is Rs. 720. Now, If the sum is invested such that the SI is Rs. 1296 and the number of years is equal to the rate percentage per year, then find the rate per cent:

• A. 8
• B. 7.5
• C. 6
• D. 4

Answer 1

The correct option is C 6

It is given that simple interest for 2 years = Rs. 720

So, for 1 year = Rs. $\frac{720}{2}$ = Rs. 360 (because it is SI)

Compound Interest for 2 year = Rs. 756

Difference in the interest = Rs. 36 (756-720)

This difference is the interest on the interest of the first year.

So rate of interest $=\left(\frac{36}{360}\right)\times 100=10\%$

Now the interest for $1^{st}$ Year = Rs. 360 at $10\%$ SI

So, principal for $1^{st}$ year = Rs. 3600

We have, $SI=\frac{(P\times R\times T)}{100}$

$\frac{3600\times k^2}{100}=1296$

k = 6