Question

A sum of money yields a compound interest of Rs. 200 and Rs. 240 at the end of the first and the second year respectively. The rate of interest is

Answer 1

Hey Dear,

◆ Answer -

Rate of compound interest = 20 %

◆ Explaination -

Let x be the principal amount and y be the rate of compound interest.

Compound interest in 1st year is given as -

200 = x × y/100

x = 20000/y ...(1)

Now, total amount will be x+200. So compound interest in 2nd year will be -

240 = (x+200) × y/100 ...(2)

Substitute (1) in (2),

240×100 = (20000/y + 200) y

24000 = 20000 + 200y

200y = 24000 - 20000

y = 4000 / 200

y = 20

Thus, rate of compound interest must be 20 %.

Hope this helps you.

Answer 2

Answer:

Rate of interest is 20%.

 

Step-by-step explanation:

Given:

Compound interest earned at the end of first year = Rs. 200

Compound interest earned at the end of second year = Rs. 240

To find: Rate of the interest.

We know that if use SI formula to find compound then for the second year Principal becomes the Amount of first year.

So let P be the principal and R be the rate of interest.

$SI=\frac{P\times R\times T}{100}$

$200=\frac{PR\times1}{100}$

PR = 20000 ..............................(1)

For second year, Principal = P + 200

$240=\frac{(P+200)\times R\times 1}{100}$

PR + 200R = 24000

20000 + 200R = 24000    ( from (1) )

200R = 24000 - 20000

R = 4000/200

R = 20%

Therefore, Rate of interest is 20%.