Question

A sum of money lends at compound interest. if compound
Interest at the end of 2nd year and at the end of
fourth year are Rs 1980 and Rs.4831.20. Find the
compound interest earned in 3rd year?

Answer 1

Step-by-step explanation:

sum of money is accumulating at compound interest at a certain rate of interest. If simple interest instead of compound were reckoned, the interest for the first two years would be diminished by Rs. 20 and that for the first three years by Rs. 61. Find the sum.

A) Rs.7000

B) Rs.8000

C) Rs.7500

D) Rs.6500

Correct Answer:

B) Rs.8000

Description for Correct answer:

Let the principal be P and rate of interest be r %. Then, principal (i) when difference between C.I. and S.I is for 2 yr) is given by

P = 20×(100)2r2

(ii) When difference between CI & SI in for 3 yrs in given by

P = 61×(10)6r2(300+r)

From eqs. (i) and (ii),

20×104r2 = 61×108r2(300+r)

=> r = 305 - 300 = 5 %

From eq.(i), P = 20×10425

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