Question

The compound interest, calculated yearly, on a certain sum of money for the second year is ₹880 and for the third year is ₹968.Calculate the annual rate of interest and the original money. ​

Answer 1

Answer:

Let, P be the principal amount and r% be the rate of compound interest.

P*[{1 + (r / 100)}^2 - {1 + (r / 100)}] = 880 ……(I)

P*[{1 + (r / 100)}^3 - {1 + (r / 100)}^2] = 968 …(II)

(II) / (I) gives:

{1 + (r / 100)} = 1.1

(r / 100) = 0.1

r = 10

Rate of compound interest = 10%.

P*{(1.1)*(1.1) - 1.1} = 880

P*(1.21 - 1.1) = 880

P*(0.11) = 880

P = 8000.

Step-by-step explanation:

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