A sum of money invested at compound interest amounts Rs.1218.99 at the end of 5 yrs. and Rs. 1267.37 at the end of 7 yrs. Find the principal and rate of interest.
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GIVEN
A sum of money invested at compound interest amounts Rs.1218.99 at the end of 5 yrs. and Rs. 1267.37 at the end of 7 yrs. Find the principal and rate of interest.
ANSWER
Amount for 4 years =Rs.23425.50
Amount for 2 years =Rs.19360
Let the rate of interest =R %
A=P (1+ RT 100in fraction)
23425.50=19360(1+
100
R
)
2
⇒(1+
100
R
)
2
=
19360
23425.50
⇒(1+
100
R
)
2
=
100
121
⇒1+
100
R
=
10
11
⇒
100
R
=
10
1
⇒R=10%
Now Amount = Rs. 19360, R=10 %, Time =2 years
19360=P(1+
100
10
)
2
⇒19360=P(
10
11
)
2
⇒P=
11×11
19360×10×10
⇒P=Rs.16000
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