Question

rmmeena borrowed from Kamal certain sum for 2 years at SI.reena send this sum to Hamid at the same rate for 2 years compound interest rate the end of 2 years she received Rs110 as SI but paid Rs100 SI. Find the sum and rate of interest.

Answer 1

sum borrowed = P
duration = 2 years   on simple interest basis.
Sum on maturity :  P + P* r/100 * 2
Simple Interest = P * r /50  = Rs 100
       So P * r = 5,000

Sum on maturity for compound interest:  P (1+ r/100)²
     = P (1 + 2 r/100 + r²/10,000)

CI = P r /50 + P * r² /10,000
110 = 5,000/50 + 5,000 * r /10,000
110 = 100 + 2 r

So r = 5       rate of interest = 5%

P = sum borrowed:  5,000/5 = Rs 1,000.