The compound interest calculated yearly on a certain sum of money for the second year is Rs 880 and for the third year it is Rs 968.Calculate the annual rate of interest and the original money.
Answers
Answered by
6
Formula for Compound Interest
CI = A - P
Now A =P*(1+r/100)^n
So, 968=P*(1+r/100)^3 {1}
And 880 = P*(1+r/100)^2 {2}
We can write 968=P*(1+r/100)^3 as
968=P*(1+r/100)^2*(1+r/100)^1
As we know P*(1+r/100)^2=880
Therefore our equation becomes
968=880*(1+r/100)^1
Which gives r = 10
For P, we can form another equation that
880=P*(1+10/100)^2
880=P*121/100
880=P*1.21
P=880/1.21
P=727.2727272727.........
CI = A - P
Now A =P*(1+r/100)^n
So, 968=P*(1+r/100)^3 {1}
And 880 = P*(1+r/100)^2 {2}
We can write 968=P*(1+r/100)^3 as
968=P*(1+r/100)^2*(1+r/100)^1
As we know P*(1+r/100)^2=880
Therefore our equation becomes
968=880*(1+r/100)^1
Which gives r = 10
For P, we can form another equation that
880=P*(1+10/100)^2
880=P*121/100
880=P*1.21
P=880/1.21
P=727.2727272727.........
Similar questions