If the compound interest earned on a certain sum for 2 years is twice the amount of simple interest for 2 years, then the rate of interest per annum is _______ percent
Question and options
If the compound interest earned on a certain sum for 2 years is twice the amount of simple interest for 2 years, then the rate of interest per annum is _______ percent
- 200%
- 2%
- 4%
- 400%
Answer and explanation
Correct answer: A - 200%
P((1+r)^2-1) = 2*(2Pr) gives 2r + r^2 = 4r, so r = 2, i.e. 200% per annum.
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