The simple interest at 10% for a certain amount after 2 years is 2000 rupees. If the interest is compounded annually, what would be the interest for same amount at the same rate after 2 years?
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First, converting R percent to r a decimal
r = R/100 = 10%/100 = 0.1 per year,
then, solving our equation
I = 2000 × 0.1 × 2 = 400
I = 400.00
The simple interest accumulated
on a principal of 2,000.00
at a rate of 10% per year
for 2 years is 400.00.
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