The ratio of the amount for two years under compound interest annually and for one year under simple interest is 6:5. When the rate of interest is same, then the value of rate of interest is ?

Answer : A. 20 %…

The ratio of the amount for two years under compound interest annually and for one year under simple interest is 6:5. When the rate of interest is same, then the value of rate of interest is ?

A. 20 %

B. 15 %

C. 18 %

D. 22 %

Answer : A. 20 %…

Explanation :

Let Principal = P, Rate = R% per annum
P ( 1 + R/100 )2 / P (1 + R *1 / 100) = 6 / 5
( 1 + R / 100 ) = 6 / 5
R / 100 = 1 / 5
R = 20
Rate of interest = 20%

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