Question

the compound interest on a sum of ₹1000 in 2 years is ₹440. find the rate of interest​

Answer 1

Answer:

This is really a system of two equations with two unknowns ( P  for principal and  R  for rate.)

Simple interest equation:

i=PRt

400=2PR

Compound interest equation:

i=P(1+R)t−P  

440=P(1+R)2−P  

440=P[(1+R)2−1]

Solve the first equation for R and plug into the second:

400=2PR  

R=200P  

440=P[(1+200P)2−1]  

440=P(1+400P+40000P2−1)  

440=P(400P+40000P2)  

440=400+40000P  

40=40000P  

P=1000  

R=200P=2001000=20%  

So the principal is $1000 and the rate is 20%. This produces $400 of simple interest in two years, or $440 of interest in two years with annual compounding.

Step-by-step explanation: