Quantitative Aptitude • Simple & Compound InterestHard
On a certain sum, the simple interest for 2 years is ₹1,800 and the compound interest for 2 years at the same rate is ₹1,836. What is the rate of interest?
A. 9%
B. 8%
C. 4%✓ Correct Answer
D. 2%
💡 Solution & Explanation
Simple interest for one year = ₹1,800 ÷ 2 = ₹900. Compound interest is higher only because, in year 2, interest is also earned on year 1's interest: ₹1,836 − ₹1,800 = ₹36. That extra is the year-2 interest on ₹900, so the rate = 36 ÷ 900 × 100 = 4%. The principal is then ₹900 × 100 ÷ 4 = ₹22,500.
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