Question

8. The compound interest for a sum of money for 2 years at the rate of 5% pa. compounded annually is
* 410. Find the simple interest on the same sum for the same time period at the same rate of interest.​

Answer 1

Answer:

⇒ It is given that simple interest in 2 years = Rs.400

⇒ Simple interest for 1 year = Rs.200

⇒ Hence, Compound interest for 1 year = Rs.200

⇒ Given compound interest for 2 years = Rs. 410

∴ Compound interest for 2 years = Compound interest 1st year + Compound interest 2nd year

⇒ Compound interest for 2nd year = Rs.410 - Rs.200 = Rs.210

⇒ That is interest on Rs.200 for 1 year = Rs.210-Rs.200=Rs.10

⇒ We know I= P×T×R/100

⇒ 10 = 200×1×R/100

⇒ 2R=10

∴ R=5%