Manoj borrowed a certain sum from Anuj at a certain rate of simple interest for 2 years He lent this...........

Quantitative Aptitude ( CCS) Compound Interest

Manoj borrowed a certain sum from Anuj at a certain rate of simple interest for 2 years. He lent this sum to Rakesh at the same rate of interest compounded annually for the same period. At the end of two years, he received Rs. 4200 as compound interest but paid Rs. 4000 only as simple interest. Find the rate of interest?

10%

20%

25%

30%

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Explanation:

Suppose the sum borrowed = Rs X
Rate of interest = R% Time = 2 years
4000=[X x R x 2 ]/100 [simple interesr formula] RX=200,000………….(1)
compound interest= P(1+r/n)^nt
X[1+ (R/100)]^2= X+4200
after solving and using value of RX
we get R=10%