Question

The compound interest calculated yearly on a certain sum of money for the second year is rupees 880 and for the third year it is rupees 968. calculate the annual rate of interest and the original money.

Answer 1

Hi,

Recall the formula, A=P[1+ (R/100)]n

Here P is principal, R is rate of interest and n is time period.

Let A1 be the amount at the end of first year.

   =P[1+ (r/100)]1= 8000[1+ (10/100)] = 8800

A2= amount at the end of second year.

  =P(1+R/100)2=8000(1+10/100)2=9680.

A3 = amount at the end of third year

   = P(1+R/100)3=8000(1+10/100)3=10648

A2 - A1 = 880.............(1),  9680-8800=880.

A3 - A2 = 968.............(2)   10648-9680=968.

Solving (1) and (2) we get,

R = 10, put R = 10 in (1), we get

P = 8000.

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Answer 2

ANSWER IS RS. 8000 AND 10%

FORMULA--> P(1+R/100)n^

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