Question

a sum of money amounts to rs.1694 in 5 years and rs.2016 in 7 years at a certain rate of compound interest , compounded annually. find the rate of interest

Answer 1

Step-by-step explanation:

Simple interest and compound interest problems are very important in all entrance exams. When a person or bank lends money to a borrower, the borrower usually has to pay an extra amount of money to the lender. This extra money is called interest. Simple interest is based on the principal amount of a loan or deposit, while compound interest is the interest that is added to the principal at the end of the each period to arrive at the new principal for the next period. Under compound interest, the amount at the end of the first year will become principal for the second year; the amount at the end of the second year becomes the principal for the third year and so on.

Simple and Compound Interest-Exercise Questions

| 112973More Related Content

1. The simple Interest on a certain sum of money at the rate of 4% p.a. for 5 years is Rs. 1680. At what rate of interest the same amount of interest can be received on the same sum after 4 years ?

a) 5% b)6% c)7% d)8%

2. The interest on a certain deposit at 4.5% p.a. is Rs. 405 in one year. How much will the additional interest in one year be on the same deposit at 5% p.a. ?

a)Rs.50 b) Rs. 45 c)Rs.40.5 d)Rs. 48.5

3. Mr.Govind invested an amount of Rs.13900 divided in two different schemes S1 and S2 at the simple interst rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in two years was Rs.3508, what was the amount invested in Scheme S2?

a) Rs.6400 b)Rs.6500

Answer 2

7.5 is the rate of interest when sum of the amount will be rs.1694 over 5 years and rs.2016 over 7 years

Given that,

The sum of the amount will be rs.1694 over 5 years and rs.2016 over 7 years, compounded at the specified annual compounding rate.

We have to find interest rate.

We know that,

Let r% be the rate of interest.

A = P(1+$\frac{r}{100})^t$

When rs.1694 over 5 years

1694 =  P(1+$\frac{r}{100})^5$ --------->equation(1)

When rs.2016 over 7 years

2017 =  P(1+$\frac{r}{100})^7$ --------->equation(2)

Divide the equation(2) and equation(1)

We get

$\frac{2016}{1694} = \frac{P(1+\frac{r}{100})^7 }{P(1+\frac{r}{100})^5}$

$\frac{144}{121} =(1+ \frac{r}{100})^2$

After solving

We get r = 7.5

Therefore, 7.5 is the rate of interest.

To know more, visit:

https://brainly.in/question/15350879

https://brainly.in/question/3174544

#SPJ3