WBCS.LIVE practice question

The Compound interest, calculated yearly, on a certain sum of money for the second year is Rs. 800/- and for the third year is Rs. 864/-. The rate of interest will be

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. 8%
  2. 10%
  3. 9%
  4. 6%

Correct answer and explanation

Correct answer: 8%

Explanation: āœ… Correct Answer: A. 8% šŸ“š Explanation: The sum for the third year increases because of interest earned on the second-year amount. The interest for the third year alone is 864 - 800 = Rs 64. To find the rate, we calculate what percentage Rs 64 is of Rs 800. The calculation (64 / 800) multiplied by 100 results in an interest rate of exactly 8 percent.