Exams › SSC CGL (Prelims) › General

A certain sum amounts to Rs. 1,600 in two years and to Rs. 2,000 in three years at compound interest compounded annually. Find the rate of interest.

1. 21%
2. 19%
3. 25%
4. 20%

Correct answer: 25%

Solution

With annual compounding, the amount in year 3 is the year 2 amount multiplied by $1+r$. So $2000/1600 = 1.25$, giving $r = 0.25 = 25\%$.

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