Question

the amount at compound interest which is calculated early on a certain sum of money is rupees 1250 in 1 year and 1375 in 2 years calculate the rate of interest

Answer 1

$\text{Amount obtained through compound interest is, } A=P(1+r)^N\\\ \text{Then, } 1250=P(1+r) \text{ and } 1375=P(1+r)^2\\\ 1+r=1.1\Rightarrow r=0.1 \text{ or } 10\% \text{ p.a.}$