Question

A certain sum under compound interest, compounded annually, amounts to rs. 5500/- in 5 years and rs. 6050/- in 6 years. what is the rate of interest?

Answer 1

Difference between when compounded at 6th year and 5th year= Rs. 6050 - Rs. 5500 = Rs.550

Time (6 years- 5 years)= 1 year

*We can calculate this as simple interest since time is one year. Thus,

Let rate be R
S.I. = PRT/100
550= 5500 x R x 1/100
550= 55R
550/55= R
10% = R

We can check:

Rs. 5500 x 10 x 1/100 = Rs. 550
Therefore S.I becomes Rs.550

Principal for next year is Rs. 6050.
Hence proved :)

Answer 2

Answer:

The Rate of Interest is 2%.

Step-by-step explanation:

Given: A certain sum under compound interest, compounded annually, amounts to rs. 5500/- in 5 years and rs. 6050/- in 6 years.

To find: rate of interest

Solution:

C.I. for fifth  year $= Rs\ 5500$

C.I. for sixth year $= Rs\ 6050$

∵ Difference between the C.I. of two successive years = $Rs\ 6050 - Rs\. 5500 = Rs.\550$

⇒ Rs. 550 is the interest of fifth year on Rs.5500

∴ Rate of interest = $\frac{ P*T}{100*I}$

$\frac{100*550}{5500*5} \\\frac{10}{5}\\=2$

The Rate of Interest is 2%.