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LIC AAO Model Paper 7

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Question : 48 of 160

Marks: +1, -0

What was the total compound interest on a sum after three years?

I. The interest after one year was Rs. 100/- and the sum was Rs. 1,000/-.

II. The difference between simple and compound interest on a sum of Rs. 1,000/-at the end of two years was Rs. 10/-

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Solution:

From the statement I,

r =

\frac{100 \times 100}{1000}

= 10%

Thus we have,

P=Rs. 1000,

r = 10%, t = 3years

Hence, C.I. can be determined From the statement II

S.I. =

\frac{1000 \times r \times 2}{100}

= 20r

C.I. = 1000

\left[\left(1+\frac{r}{100}\right)^2-1\right]

∴ C.I. - s.I

= 1000

\left[\frac{200r+r^2}{10000}\right]

- 20r

⇒ 2000r +

r^2

- 200r = 100

⇒ r = 10

Hence, C.I. can be determined

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