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. 2560 and Rs. 2800 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 2560/2 = Rs. 1280 Difference between compound Interest and Simple Interest for 2 years = 2800 – 2560 = Rs. 240 Desired rate = 240/1280 × 100 = 18.75%
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