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. 2700 and Rs. 2764.80 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 2700/2 = Rs. 1350 Difference between compound Interest and Simple Interest for 2 years = 2764.80 – 2700 = Rs. 64.8 Desired rate = 64.8/1350 × 100 = 4.80%
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