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. 1500 and Rs. 1560 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 1500/2 = Rs. 750 Difference between compound Interest and Simple Interest for 2 years = 1560 – 1500 = Rs. 60 Desired rate = 60/750 × 100 = 8%
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