CAT 1991QA Question 42

Compound InterestEasy
Passage / Data

Answer the following questions based on the information given below:

There were a hundred schools in a town. Of these, the number of schools having a play – ground was 30, and these schools had neither a library nor a laboratory. The number of schools having a laboratory alone was twice the number of those having a library only. The number of schools having a laboratory as  well as a library was one fourth the number of those having a laboratory alone. The number of schools  having either a laboratory or a library or both was 35.

A sum of money compounded annually becomes Rs. 625 in two years and Rs. 675 in three years. The rate of interest per annum is

Answer & solution

  • A

    7%

  • 8%

  • C

    6%

  • D

    5%

Solution

For a difference of 1 year, CI can be computed as SI. 

Hence, from the 2nd year to the 3rd year interest earned = (675 – 625) = Rs. 50 on Rs. 625.

Hence the Rate of interest 50/625 × 100 = 8% p.a.

Hence, option (b).

CAT 1991 QA Q42: A sum of money compounded annually becomes Rs. 625 in two years and Rs. 675 in three years. The rate of intere — Solution | TheCATExam