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. 4500 and Rs. 5400 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 4500/2 = Rs. 2250 Difference between compound Interest and Simple Interest for 2 years = 5400 – 4500 = Rs. 900 Desired rate = 900/2250 × 100 = 40%
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