On a certain Principal if the Simple interest for two years is Rs 2600 and Compound interest for the two years is Rs 2769, what is the rate of Interest?
- A6.5%
- B26%
- C19.5%
- D13%
Solution & Step-by-step Explanation
Simple Interest (SI) for 2 years = Rs 2600
Therefore, SI for 1 year =
2
2600
=Rs 1300
The difference between Compound Interest (CI) and Simple Interest (SI) for 2 years is due to the interest earned on the first year's interest.
Difference (CI - SI)=2769−2600=Rs 169
This Rs 169 is the interest earned on the first year's interest (Rs 1300) for 1 year.
Rate of Interest (R)=
SI of 1st year
Difference
×100
R=
1300
169
×100=
13
169
=13%
Therefore, SI for 1 year =
2
2600
=Rs 1300
The difference between Compound Interest (CI) and Simple Interest (SI) for 2 years is due to the interest earned on the first year's interest.
Difference (CI - SI)=2769−2600=Rs 169
This Rs 169 is the interest earned on the first year's interest (Rs 1300) for 1 year.
Rate of Interest (R)=
SI of 1st year
Difference
×100
R=
1300
169
×100=
13
169
=13%