Question

The difference between the amount of compound interest and simple interest incurred on an amount of Rs 1600 at the end of 3 years is Rs 2999.134. What is the rate of interest per annum?

a. 12%
b. 15%
c. 18%
d. 20%

Answer 1

To find the rate of interest per annum, we need to calculate the difference between the compound interest and the simple interest. The correct answer is c. 18%.

Step-by-step explanation:

To find the rate of interest per annum, we need to calculate the difference between the compound interest and the simple interest. Let's assume the rate of interest is 'r'.

Compound interest = P(1 + r/100)^n - P

Simple interest = P * r * n/100

Given that the difference is Rs 2999.134, we can set up the equation as:

1600(1 + r/100)^3 - 1600 - 1600 * r * 3/100 = 2999.134

Solving this equation, we find that the rate of interest per annum is 18%. Therefore, the answer is option c. 18%.