CA Foundation · Quantitative Aptitude · Mathematics of Finance
A sum of money amounts to ₹13,600 in 4 years and to ₹15,400 in 6 years at the same rate of simple interest. What is the rate of interest per annum?
The rate is 9% per annum. The extra ₹1,800 earned over two years means ₹900 per year, so the principal is 13,600 − 3,600 = ₹10,000. Rate is 900 divided by 10,000, which is 9%.
- A10%
- B9%Correct
- C12%
- D7.5%
Explanation
Interest for 2 years = 15,400 − 13,600 = 1,800, so yearly interest = 900. Principal = 13,600 − 4×900 = 10,000. Rate = 900/10,000 × 100 = 9%. Check: 10,000 + 6×900 = 15,400. Using 1,800 as yearly interest would wrongly give 18%.
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