The compound interest on a sum for 5th year is Rs. 7800 and compound interest for sixth year is Rs. 9048 (interest is compounded annually). What is the rate of interest?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 16%.
| Understanding/Application |
|
Amount for 5 years = Rs.7800 Amount for 6 years = Rs.9048 Then, Interest for 6th year = Rs.9048 - Rs.7800 = Rs.1248 Principal for 6th year = Rs.7800 Let the rate of interest be R% 7800 × (1 + R/100) = 9048 (1 + R/100) = 9048/7800 100 + R = 116 |
| R = 16% |