AFCAT Model Paper 7

Given:
The simple interest on a sum of money for one year is Rs. 260 and
The compound interest on the same sum for two years is Rs. 540.80
Formula Used:
SI=

(P×r×t)

100

CI=P((1+

r

100

)t−1)
Where p is the sum, r is rate and t is the time in years.
Calculation:
According to the question
⇒ 260=

(p×r)

100

⇒ 540.80=p((1+

r

100

)2−1)
Dividing the two equations we get,
⇒

260

540.80

=

( r 100 )

(1+ r 100 )2−1

⇒

25

52

=

r 100

( r 100 )2+ 2r 100

⇒

1

100

+2=

52

25

⇒r=

200

25

∴ The rate percent per annum is 8.