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Andrews earns an interest of Rs. 1596 for the third year and Rs. 1400 for the second year on the same sum. Find the rate of interest if it is lent at compound interest.
Options:
A .  12%
B .  13%
C .  14%
D .  15%
Answer: Option C

Answer : Option C

Explanation :

Interest earned in 3rd year = Rs. 1596
Interest earned in 2nd year = Rs. 1400
i.e, in 3rd year, Andrews gets additional interest of (Rs. 1596 - Rs. 1400) = Rs.196
This means, Rs.196 is the interest obtained for Rs.1400 for 1 year
$MF#%\text{R} = \dfrac{100 \times \text{SI}}{\text{PT}} = \dfrac{100 \times 196}{1400 \times 1} = \dfrac{196}{14} = 14\%$MF#%



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