Multiple Choice Questions

If a sum increases by 21 after 2 years then the rate of compound interest per annum when compounded ...........

Quantitative Aptitude (MTS) Compound Interest

If a sum increases by 21% after 2 years, then the rate of compound interest per annum, when compounded annually, must be:

This questions was previously asked in

SSC MTS 2nd Nov 2021 Shift-1

10.5%

11.5%

10%

11%

- You want to find the annual compound interest rate that results in a 21% increase after 2 years.

- The formula for compound interest is: A = P(1 + r)^n, where A is the amount, P is the principal, r is the rate, and n is the number of years.

- We're told A is 1.21P after 2 years.

- So, 1.21 = (1 + r)^2.

- Let's solve for r: $r = \sqrt{1.21} - 1$ .

- Calculating, r ˜ 0.1 or 10%.

The correct answer is Option 3: 10%.

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