Question
Find the rate of simple interest at which Rs. 10000
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 20% at compound interest compounded annually for same time period.Solution
Compound interest earned in 2 years = 10000 × [(1.2)^2 – 1] = 0.44 × 10000 = Rs. 4400 Let the rate of simple interest is R% According to question, (10000 × R × 2)/100 = 4400 200 × R = 200 R = 22%
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