Question
Find the rate of simple interest at which Rs. 8000
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 40% at compound interest compounded annually for same time period.Solution
Compound interest earned in 2 years = 8000 times; [(1.4)^2 ndash; 1] = 0.96 times; 8000 = Rs. 7680 Let the rate of simple interest is R% According to question, (8000 times; R times; 2)/100 = 7680 160 times; R = 7680 R = 48%
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