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On a certain principal if the simple interest for two years is Rs. 1400 and compound interest for the two years is Rs. 1449, what is the rate of interest?
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- 7 percent
- 3.5 percent
- 14 percent
- 10.5 percent
Correct Option: A
Given that , S.I. = Rs. 1400 , C.I = Rs. 1449
Let the principal be Rs. P and rate of interest be R% per annum.
| ∴ S.I.= | |
| 100 |
| ⇒ 1400 = | |
| 100 |
⇒ PR = 1400 × 50 = 70000 ..... (i)
Again, for 2 years,
| C.I. – S.I. = | |
| 10000 |
| ⇒ 1449 – 1400 = | |
| 10000 |
| ⇒ 49 = | |
| 10000 |
| ⇒ 49 = | |
| 10000 |
[From equation (i)]
⇒ 7R = 49
| ⇒ R = | = 7% per annum | |
| 7 |
