Question
Find the rate of simple interest at which Rs. 8500
should be invested for 2 years so that the interest earned will be same as the interest received when the same amount is invested at 10% at compound interest compounded annually for same time period.Solution
Compound interest earned in 2 years = 8500 times; [(1.1)^2 ndash; 1] = 0.21 times; 8500 = Rs. 1785 Let the rate of simple interest is R% According to question, (8500 times; R times; 2)/100 = 1785 170 times; R = 1785 R = 10.5%
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