On a certain sum the interest is compounded annually If the compound interest for the second year is...........

Quantitative Aptitude (MTS) Compound Interest

On a certain sum, the interest is compounded annually. If the compound interest for the second year is Rs. 400 and the compound interest for the fourth year is 576, then what is the rate of interest per annum?

This questions was previously asked in

SSC MTS 20th July 2022 Shift-2

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20%

25%

15%

44%

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Explanation:

Correct option 1: 20%

Note that the Amount in 2 years is 400.
The amount in 4 years is 576.
So There is a gap of 2 years.
400:576
Square root both sides:
20:24
The difference in amount is 24 - 20 = 4
Therefore Rate = 4/20 x 100 = 20%