Instructions

In each of the following questions, a question is followed by information given in three statements. You have to study the question alongwith the statements and decide the information given in which of the statement (s) is necessary to answer the question.

Question 107

What is the rate of interest per cent?
I. An amount doubles itself in 5 years on simple interest.
II. Difference between the compound interest and the simple interest earned on a certain amount in two years is Rs. 400.
III. Simple interest earned per annum is Rs. 2,000.

Solution

Let rate of interest = $$r \%$$

Statement I : Let Principal = Rs. $$x$$

=> Amount after 5 years = Rs. $$2x$$

=> Interest after 5 years = Rs. $$(2x - x) = x$$

$$\therefore$$ S.I. = $$\frac{P \times R \times T}{100}$$

=> $$x = \frac{x \times r \times 5}{100}$$

=> $$r = \frac{100}{5} = 20 \%$$

Thus, I alone is sufficient.


Statement II : C.I. - S.I. = 400

=> $$(P [(1 + \frac{r}{100})^2 - 1]) - (\frac{P \times r \times 2}{100}) = 400$$ -----------Eqn(1)

Here, 2 variables (P & r) are unknown. So, II alone is insufficient.

Combining II and III : 

S.I. earned for 1 year = Rs. 2000

=> $$\frac{P \times r \times 1}{100} = 2000$$

=> $$P \times r = 2,00,000$$

Substituting above value in equation (1), we get $$r = 20 \%$$

Thus, II and III together are sufficient.


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