If a sum when placed at compound interest grows to Rs.6,400 in 2 yrs and to Rs. 8,000 in 3 yrs, find the rate percent p.a.
Let the principal be P. ∴ P + CI for 3 yrs = Rs. 8,000----- (i) And P + CI for 2 yrs = Rs. 6,400----- (ii) Subtracting (ii) from (i), we get CI for the 3rd yr = 8,000 – 6,400 = Rs. 1600 Thus, CI calculated in the 3rd yr is basically the interest on the amount generated after 2 yrs which is Rs. 6,400. R = (SI × 100)/(P × T) = (1600 × 100)/(6400 × 1) = 25 % p.a.
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