The compound interest accrued on a principal during the second and third years amounts to Rs.1200 and Rs.1440 respectively. What is the annual rate of interest?

Compound Interest MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

PPSCFPSCNTSPakistan govt jobs
Subject
Compound Interestmathematics-mcqs › compound-interest
Published
23 Sept 2019
Last updated
28 May 2026

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Explanation

The difference between the compound interest for the third and second years is Rs.1440 - Rs.1200 = Rs.240, which represents the interest earned on Rs.1200 for one year. Therefore, the rate of interest is calculated as (240 / 1200) × 100 = 20% per annum.

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