Question

Sanjay borrowed a certain sum of money from anil at a certain rate of simple interest for 2 years

Answer 1

Sanjay borrowed a certain sum from Anil at a certain rate of simple interest for 2 yr. He lent this sum to Ram at the same rate of interest compounded annually for the same period. At the end of two years, he received Rs.4200 as compounded interest but paid Rs.4000 only as simple interest, find the rate of interest. 


A) 15%

  B) 20%

C) 35%

  D) 10%


Correct Answer:

  D) 10%


Description for Correct answer

Let the money borrowed be Rs. x and rate be r%
∴∴ 4000 = x×r×2100x×r×2100
=> r x = 200000
and x (1+r100)2=x+4200(1+r100)2=x+4200
=> xr210000+2r100=4200xr210000+2r100=4200
=> 20r + 4000 = 4200
=> r = 10%

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