Correct
Not quite — the correct answer is highlighted
Show answer & explanationHide answer
Answer: (A) 10 percent
Explanation
In compound interest, the amount at the end of the second year acts as the principal for the third year. Therefore, the interest earned during the third year is the difference between the amount at the end of the third year and the amount at the end of the second year.
The rate of interest (r) is calculated using the formula: r = ((A₃ - A₂) / A₂) × 100
Given: Amount at the end of 2nd year (A₂) = 30250 Amount at the end of 3rd year (A₃) = 33275
Substituting these values into the formula: r = ((33275 - 30250) / 30250) × 100 r = (3025 / 30250) × 100 r = 10%