Atul borrowed a sum of Rs 12000 and agreed to repay it by…

Atul borrowed a sum of Rs 12000 and agreed to repay it by paying Rs 4800 at the end of first year and Rs 9240 at the end of second year.What is the rate of compound interest compunded annually ?

Show answer & explanation

Correct answer: A

Explanation

The correct answer is option 1 i.e. 10%

We have given,

P = Rs. 12,000

n = 2 years

r = ?

1st installment = 4800

2nd installment = 9240

Now according to the question,

{P × (1 + $\frac{r}{100}$ ) - 1st installment} × (1 + $\frac{r}{100}$ ) = 2nd installment

⇒ {12000 × (1 + $\frac{r}{100}$ ) - 4800} (1 + $\frac{r}{100}$ ) = 9240

⇒ (12000 + 120r - 4800) (1 + $\frac{r}{100}$ ) = 9240

⇒ (7200 + 120r) (1 + $\frac{r}{100}$ ) = 9240

⇒ 7200 + 72r + 120r + 1.2r² = 9240

⇒ r²+ 160r - 1700 = 0

⇒ r²+ 170r - 10r - 1700 = 0

⇒ (r + 170) (r - 10) = 0

⇒ r = -170 can't posible

⇒ r = 10%

SSC CGL 2021 PYQ — Question 63