Question
Simple interest and compound interest (compounded
annually) earned on a sum at the end of 2 years at a certain rate of interest p.a. are Rs. 2500 and Rs. 2750 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 2500/2 = Rs. 1250 Difference between compound Interest and Simple Interest for 2 years = 2750 - 2500 = Rs. 250 Desired rate = 250/1250 x 100 = 20%
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