Discussion
A sum of money invested at compound interest amounts to Rs. 800 in 3 years and to Rs. 840 in 4 years. The rate of interest per annum is
Answer: C
\[ A = P\left(1 + \frac{R}{100}\right)^{n}, \qquad \text{CI} = A - P, \qquad \text{SI} = \frac{PRn}{100} \]
The jump from year 3 to year 4 is one year's growth on the year-3 amount.
\[ \frac{840}{800} = 1 + \frac{R}{100} = 1.05 \]
\[ R = 5\% \]
Equivalently, the Rs. 40 earned in the fourth year is 5% of the Rs. 800 standing at the start of it. No principal or time is needed - only the ratio of two consecutive amounts.
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