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. 2400 and Rs. 2764.8 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 2400/2 = Rs. 1200 Difference between compound Interest and Simple Interest for 2 years = 2764.8 – 2400 = Rs. 364.8 Desired rate = 364.8/1200 × 100 = 30.4%
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