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The difference, after two years, between compound interest and simple
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22 Nov 2023, 03:08
22 Nov 2023, 03:08
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The difference, after two years, between compound interest and simple interest on a sum of money invested at the same rate of interest, is $18. If the simple interest accumulated on the sum after two years is $180, what is the rate of interest at which the sum of money was invested?
(A) 36%
(B) 30%
(C) 25%
(D) 20%
(E) 10%
(A) 36%
(B) 30%
(C) 25%
(D) 20%
(E) 10%
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Free Materials for the GRE General Exam - Where to get it!!
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The difference, after two years, between compound interest and simple
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23 Nov 2023, 04:42
23 Nov 2023, 04:42
1
for first year compound interest and Simple interest are same; i.e. CI= SI = 180 /2 = 90
for Second year C.I. and S.I are $18 different. which is due to r% of 90 = 18 , implies r= 20.
Hence option D
for Second year C.I. and S.I are $18 different. which is due to r% of 90 = 18 , implies r= 20.
Hence option D
Re: The difference, after two years, between compound interest and simple
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29 Jan 2024, 17:20
29 Jan 2024, 17:20
SidharthG wrote:
for first year compound interest and Simple interest are same; i.e. CI= SI = 180 /2 = 90
for Second year C.I. and S.I are $18 different. which is due to r% of 90 = 18 , implies r= 20.
Hence option D
for Second year C.I. and S.I are $18 different. which is due to r% of 90 = 18 , implies r= 20.
Hence option D
20% is not exactly much the interests information. Can you please explain why you think the answer is 20%?
We know that the simple interest creates $180 after two years.
Also we know that the difference between the compound and simple interests after two years is $18.
From this information, we can assume that after two years, the compound amount is 180 + 18 = $198.
Now assume that the interest rate is 20%.
For Simple Interest:
P + 2(20/100)P = 180
(7*P) / 5 = 180
P = 900/5
P = $128.6
For Compound Interest:
P (1 + 20/100)^2 = 198
1.44*P = 198
P = 137.5
If the Interest Rate is 20%, the principles don't much.
I don't know how to solve it, but I am not sure that the answer is 20%...
