Mathematics for FinanceMTP May 18Question 1277 of 512
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The compound interest on a certain sum is 200\displaystyle 200 209\displaystyle 209 simple interest is 200\displaystyle 200 for 2\displaystyle 2 years. What is the rate per cent for 2\displaystyle 2 years?

Options

A9%\displaystyle 9\%
B18%\displaystyle 18\%
C4.5%\displaystyle 4.5\%
D10%\displaystyle 10\%
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Correct Answer

✅ Option a — 9%\displaystyle 9\%

All Options:

  • A9%\displaystyle 9\%
  • B18%\displaystyle 18\%
  • C4.5%\displaystyle 4.5\%
  • D10%\displaystyle 10\%

Detailed Solution & Explanation

**Derivation of Interest Rate** Given: - Simple Interest (SI\displaystyle SI) for 2\displaystyle 2 years = Rs. 200\displaystyle \text{Rs. }200 - Compound Interest (CI\displaystyle CI) for 2\displaystyle 2 years = Rs. 209\displaystyle \text{Rs. }209 **Step 1: Calculate Simple Interest per year** SI1=2002=Rs. 100SI_1 = \frac{200}{2} = \text{Rs. }100 **Step 2: Find the difference between CI and SI** Difference=CI−SI=209−200=Rs. 9\text{Difference} = CI - SI = 209 - 200 = \text{Rs. }9 This difference is the interest earned on the first year's interest of Rs. 100 for 1 year. **Step 3: Solve for the rate of interest (R\displaystyle R)** Difference=SI1×R×1100\text{Difference} = \frac{SI_1 \times R \times 1}{100} 9=100×R×11009 = \frac{100 \times R \times 1}{100} 9=R  ⟹  R=9% per annum9 = R \implies R = 9\% \text{ per annum} Hence, **Option A** is the correct answer.

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