Question : A sum becomes 1.96 times itself in 2 years when invested at compound interest (compounding annually). What is the annual rate of interest?
Option 1: 20 percent
Option 2: 25 percent
Option 3: 40 percent
Option 4: 30 percent
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Correct Answer: 40 percent
Solution : Given that, a sum becomes 1.96 times itself in 2 years. Let the principal be $P$. We know, $\text{Total Amount}=\text{Principal}×(1+\frac{\text{Rate}}{100})^{\text{Time}}$ $⇒1.96P = P \left(1 + \frac{r}{100}\right)^2$ $⇒1.96 = \left(1 + \frac{r}{100}\right)^2$ $⇒\sqrt{1.96} = 1 + \frac{r}{100}$ $⇒\frac{r}{100} = 1.4 - 1$ $⇒r = 100 \times 0.4$ $⇒r=40\%$ Hence, the correct answer is 40 percent.
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Question : A sum amounts to Rs. 6580 in 2 years and amounts to Rs. 7896 in 3 years on compound interest (compounding annually) at the same rate of interest. What is the annual rate of interest?
Option 1: 30%
Option 2: 40%
Option 3: 15%
Option 4: 20%
Question : Rajeev invested Rs. 3,000 for 2 years at compound interest (compounded annually) in a company that paid him interest of Rs.1,320. What will be the annual rate of interest at which Rajeev invested his money?
Option 1: 30 percent
Option 2: 24 percent
Option 3: 16 percent
Option 4: 20 percent
Question : A certain sum was invested at the rate of 10% for 2 years at Compound interest and compounded annually. The same sum was invested for the same period and the same rate of interest at Simple interest. If the difference between Compound interest and Simple interest was Rs. 200 find the sum.
Option 1: Rs. 30,000
Option 2: Rs. 25,000
Option 3: Rs. 22,000
Option 4: Rs. 20,000
Question : A sum of Rs. 3000 becomes Rs. 6000 when invested in a scheme of simple interest. If the annual rate of interest and the number of years for which the sum was invested are the same, then what is the annual rate of interest?
Option 1: 5%
Option 2: 20%
Option 3: 10%
Option 4: 15%
Question : At a certain sum of money with the interest rate of 6% per annum for 4 years, the simple interest is Rs. 4500. Find the compound interest (compounding annually) of 2 years at the same sum when the rate of interest is 4% per annum.
Option 1: Rs. 1,530
Option 2: Rs. 1,430
Option 3: Rs. 1,830
Option 4: Rs. 1,560
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