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A sum of money amounts to Rs. 10648 in 3years and Rs. 9680 in 2 years. The rate of interest is_________?

Correct answer: B. 10 %

  • A. 5 %
  • B. 10 %
  • C. 15 %
  • D. 20 %

Explanation

The amount grows from Rs.9,680 after 2 years to Rs.10,648 after 3 years, so the one-year factor is Rs.10,648 ÷ Rs.9,680 = 1.10. Hence the compound interest rate is 1.10 - 1 = 0.10 = 10% per annum. The likely wrong choice is 5%, which comes from halving the 10% growth factor incorrectly.

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