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. 1100 and Rs. 1144 respectively. Find the rate of interest.Solution
Simple interest for 1 year = 1100/2 = Rs. 550 Difference between compound Interest and Simple Interest for 2 years = 1144 – 1100 = Rs. 44 Desired rate = 44/550 × 100 = 8%
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