Question

Ram earns an interest of 600 over two years on a simple interest basis

Answer 1

Answer:

Explanation:

Simple interest = 600

time = 2 years

Rate = ?

Interest on a simple interest =600

Time =  2 years

So that  Interest for one year = Rs 300.

If Ram invests the amount on a compound interest , then interest for the first year is the same as investing in simple interest basis and that is equal to Rs 300.

So, that compound interest is equal to simple interest of first year, that is 300

For second year, CI for second year is 630 – 300 = 330 and Rs 30 is the interest earned on interest of 300 which amounts to 10%.

Therefore, rate of interest = 10%.