The compound interest (compounded annually) on Rs 8200 for 2 years at R% p.a is Rs 1722. Had the rate of interest been (R+10)% p.a what would have been the interest on the same sum of money for the same time (2 years)?
CI = A + P 1722 = 8200 (1 + r/100)2 - 8200 9922 = 8200(1 + r/100)2 9922/8200 = (1 + r/100)2 121/100 = (1 + r/100)2 (11/10)2 = (1 + r/100)2 11/10 = (1 + r/100) 11/10 - 1 = r/100 1/10 = r/100 r = 10% p.a New rate = 10 + 10 = 20% p.a CI = 8200 (1 + 20/100)2 - 8200 = 8200 x 120% x 120% - 8200 = 11808 - 8200 = 3608
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