Question

Example 25 The difference between the compound interest and the simple interest on
*42000 for two years is 105 at the same rate of interest per annum. Find :
(i) the rate of interest
(ii) the compound interest earned in the second year.​

Answer 1

(i) rate of interest = 5

Step-by-step explanation:

(i) CI -SI = P× (r÷100) ×(r÷100) for two years

105 = 42000× (r÷100) ×(r÷100)

1050= 42× r^2

r^2= 25

rate of interest, r= 5

(ii) compound interest earned in the second year = 4305

ie, 42000×(5÷100) for 1st year

42000 ×(5÷100) = 2100

the same amount will get on the 2nd year + the 5% of the 2nd year's interest

= 2100+ 2100×(5÷100)

=2100 + 105

= 2205

the compound interest earned in the second year= 2100+2100+105

= 4305