Question
Find the rate of simple interest at which Rs. 6000
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 = 6000 times; [(1.40)^2 ndash; 1] = 0.21 times; 6000 = Rs. 1260 Let the rate of simple interest is R% According to question, (6000 times; R times; 2)/100 = 1260 120 times; R = 1260 R = 10.5%
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