Question

The ratio of the amount for 3 years under C.I. annually and for one year under S.I. is 36:25. If the same rate of interest is charged then find the rate-  

Options

• 30%

• 20%

• 15%

• 25%

Answer 1

20%

Explanation:

We are given

`("P"(1 + "r"/100)^3)/("P" + ("P" xx "r" xx 1)/100) = 36/25`

`(1 + "r"/100)^2 = 36/25`

⇒ `1 + "r"/100 = 6/5`

`1 + "r"/100 = 1 + 1/5 ⇒ "r"/100 = 1/5`

and r = 20%