Question

A certain sum of money of money at compound interest becomes rupees 7396 in two years and rupees 7950.70 in three years. find the rate of interest

Answer 1

We know that A = P(1+r/100)

                  7396   =  P(1+r/100)^2    ---------------- (1)

               7950.70 = P(1+r/100)^3       ----------------- (2)

On solving (2) by (1), we get

7950.70/7396  = P(1+r/100)^3/P(1+r/100)^2

1.075 = 1 + r/100

r/100 = 0.075

r = 7.5%.


Hope this helps!