A sum of money amounted to Rs. 720 in 2 years and Rs. 792 in 3 years when interest is compounded annually. The annual rate of interest, (in %) is:
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 10%
Trick : (Amount of 3rd year - Amount of 2nd yr) × 100/Amount of 2nd year
Rate of interest = (792 - 720) × 100/720
⇒ Rate of interest = 72 × 100/720 = 10%