10. The difference between the compound interest and the simple interest accrued on an amount of Rs. 18,000 in 2 years was Rs. 405. What was the rate of interest p.c.p.a. ?

Correct Answer : D.

Let the rate be R% p.a. then,

[ 18000 ( 1 + ( R / 100 )² ) - 18000 ] - ((18000 * R * 2) / 100 ) = 405

18000 [ ( 100 + (R / 100 )² / 10000) - 1 - (2R / 100 ) ] = 405

18000[( (100 + R ) ² - 10000 - 200R) / 10000 ] = 405

9R² / 5 = 405 , R² =((405 * 5 ) / 9) = 225

R = 15.

Rate = 15%.