Given that the interest is only earned on principal, if an investment of ₹1000.00 amounts to ₹1440 in two years, then what is the rate of interest earned?

Aptitude and Reasoning MCQ Questions with Solutions

Given that the interest is only earned on principal, if an investment of ₹1000.00 amounts to ₹1440 in two years, then what is the rate of interest earned?

A) 20
B) 22%
C) 21%
D) 11%

Answer & Explanation:

B) 22%
The rate of interest earned can be found using the formula:
I = Ptr/100
Where P is the principal, t is the time in years
r is the rate of interest, I is the interest earned
It is given that
I = 1440 - 1000 = 440
t = 2 years
r = ?
P = 1000
Substituting it in the formula, we get
440 = (1000 × 2 × r)/100
By further calculation,
440 = 2000r/100
44000 = 2000r
Divide both sides by 2000
r = 22
Therefore, the rate of interest is 22%.

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