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. 2800 respectively. Find the rate of interest.
Simple interest for 1 year = 2500/2 = Rs. 1250 Difference between compound Interest and Simple Interest for 2 years = 2800 – 2500 = Rs. 300 Desired rate = 300/1250 × 100 = 24%
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