Question

A sum of compound interest yields Rs.200 and Rs.220 at the end of first and second year respectively. The rate % is

Answer 1

Answer:

The final rate of interest first year and second year in an compound interest is 10%

Step-by-step explanation:

Step 1: Given Data

Let r be rate of interest  

P is initial sum

Compound Interest of first year is Rs 200

Second year is Rs.220

Step 2:

P(1+r100)=200…………………(1)

P(1+r100)2=220; .....................(2)

Step 3:

Dividing equation (2) by equation (1) we get:  

1+r100=1.10;

r100=1.10-1   (Subtract the value 1.10-1=0.1)

r100=0.1

r= 10%  (Multiply the value 100x0.1=10%)

The final rate of interest first year and second year in an compound interest is 10%