Question

if the compound interest on a sum for 2 years at 4% per annum is rupees 408 then the simple interest on the same sum at the same rate of interest for same period
STEP BY STEP EXPLANATION ​

Answer 1

Answer:

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Step-by-step explanation:

Let the interest be compounded annually.

Simple interest for first year = Simple interest for second year = Rs 200

Compound interest in first year = Simple interest for Ist year = Rs 200.

Compounded interest for 2 years = Rs 408

Therefore Compound interest for second year = Rs 408 — Rs 200 = Rs 208.

The CI in second year is Rs 8 more than CI for first year as the interest of first (= Rs 200) also earns interest for one year.

Therefore Rs 8 is the interest on Rs 200 for one year.

Therefore rate of interest = (8 × 100)/(200 ×1) = 4%

Rate of interest =4% per annum.