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. 3500 and Rs. 3850 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 3500/2 = Rs. 1750 Difference between compound Interest and Simple Interest for 2 years = 3850 – 3500 = Rs. 350 Desired rate = 350/1750 × 100 = 20%
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