On a certain sum , the compound interest in 2 years amounts to rupees 4240. Is the rates of interest for successive years are 10% and 15% respectively, find the sum.
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Let the sum be 'P'
In CI,interest at end of year is added to Principal...thus it becomes principal for next year..
10%(P)=0.1P..[it is CI for 1st yr]
now this CI is added to P to calculate next yr principal..i.e,
next year principal=P+0.1P=1.1P
15%(1.1P)=0.165P..[it is CI for 2nd yr]
total CI=1st yr CI+ 2nd yr CI
=(0.1P)+(0.165P)
=0.265P
given total CI is 4240..hence,
(0.265)P=4240
P=16000
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