On a certain sum of money lent out of
c.i interest for first second and third year are rs 1500 rs 1725 and rs 2070 respectively find the rate of interest for the second year n third year
Answers
The rate of interest for the second year n third year is 15% and 20% respectively
Explanation:
The computation is shown below:
As we know that
Compound interest = Principal × (1 + interest rate)^number of years
As in the first case
The equation is
Compound interest = Rs 1500 × (1 + interest rate)^1 ......................(i)
Now in the second case
The equation is
Compound interest = Rs 1725 × (1 + interest rate)^2 ......................(ii)
Now dividing the second equation by the first equation we can get the interest rate for second year i.e 15%
And, for the third case,
The equation is
Compound interest = Rs 2070 × (1 + interest rate)^3 ......................(ii)
Now dividing the third equation by the second equation we can get the interest rate for third year i.e is 20%
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