Question

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.

Answer 1

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