CAT 2025 Interest Question (Hard)

Question

A loan of Rs 1000 is fully repaid by two installments of Rs 530 and Rs 594, paid at the end of first and second year, respectively. If the interest is compounded annually, then the rate of interest, in percentage, is

Optima Learn · Accepted Answer

Let the annual interest rate be r in decimal . Discount the two instalments to present value 1 r 1 r 2 1000 Set x 1 r . Then 594x 2 530x-1000 0 Discriminant 530 2 4 cdot594 cdot1000 280900 2376000 2656900 1630 2. x 2a x 2 cdot594 1188 297 So 1 r 275 r 275 275 25 0.08 8

CAT 2025 Interest — Previous Year Question

CAT 2025

Quantitative

Interest

Hard

Stand Out in Your CAT Interview Round!

Practice

Features

Support