Rahul borrowed a certain sum from Harish at a certain rate of simple interest for 2 years He lent th...........

Quantitative Aptitude ( CCS) Compound Interest

Rahul borrowed a certain sum from Harish at a certain rate of simple interest for 2 years. He lent this sum to Shilpa at the same rate of interest compounded annually for the same period. At the end of two years, he received Rs. 2400 as compound interest but paid Rs. 2000 only as simple interest. Find the rate of interest.

20%

30%

40%

10%

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Explanation:

Let sum be x.
Simple interest on x for 2 years = Rs.2000
SI= P*R*T/100
=> 2000= x*R*2/100
=> 100000=xR——-(1)
Compound Interest on x for 2 years = 2400 P(1+R/100)^t – P = 2400
=>x(1+R/100)^2 – x = 2400
=> 2xR/100 + xR^2/100 = 2400——(2)
On substituting (1) and (2), we get
R = 40%

Hence, option 3 is the correct answer.

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