Question

At the end of 2 years difference between simple and compound interest is Rs. 2166. If the principal is Rs. 60000, then what is the rate of interest?​

Answer 1

Answer:

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Answer 2

Concept

Calculating the amount of interest charged on a sum at a particular rate and for a certain duration of time is done using simple interest. Contrary to compound interest, which adds the interest from the principal of prior years to determine the interest of the following year, the principal amount in simple interest remains constant.

Given

time = 2 years

difference between simple and compound interest = Rs. 2166

principal = Rs. 60000

Find

we need to determine the rate of interest.

Solution

we know that,

Difference = P(R/100)² = S.I × R/200

where P is the principal

R is the rate of interest

SI is the simple interest

therefore, 2166 = 60000(R/100)²

2166 = 60000(R²/10000)

2166 = 6R²

R² = 2166/6

R² = 361

R = √361

R = 19

hence we get the rate of interest as 19%

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