Question

10. The compound interest calculated yearly, on a certain sum of money for the second year is RS.220 and for the third year is Rs.242. calculate the rate of interest and the sum of money.

Answer 1

Answer:

$<small> CI - Compound interest is same as the simple interest but the only change is that, here an interest is applied on the previous year interest unlike Simple interest.</p><p></p><p>Understanding this is helpful to solve this.</p><p></p><p>If Simple interest is applied on the SUM then the interest would have been same all the years. Say, if 2200 for 2nd yr then for 3rd yr also it is 2200 only.</p><p></p><p>But in this case the 2nd yr interest is 2200 and 3rd yr is 2420 which means apart from the actual interest the extra 220 (2420–2200) is for the previous year interest ie., for 2200.</p><p></p><p>220 is interest for 2200 which means 10%.</p><p></p><p>ANSWER : 10%</p><p>$