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. 1300 and Rs. 1430 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 1300/2 = Rs. 650 Difference between compound Interest and Simple Interest for 2 years = 1430 ; 1300 = Rs. 130 Desired rate = 130/650 times; 100 = 20%
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