Question

The simple interest in 3 years and the compound interest in 2 years on a certain sum of money at the same rate are rs.1200 and its.832 respectively.find the rate of interest and principal

Answer 1

Answer:Principal = 80000

Rate of interest = 0.5%

Step-by-step explanation:

Let us assume principal = P

Rate of interest = a%

So, first let us consider the case of simple interest.

In simple interest,Total Interest = Principal×Rate of interest×Time in years/100.

Putting the values we get, 1200=P×a×3/100

P×a= 40000

Now we'll move to compound interest

After 1st year total amount will be = P+P×a×1/100=P+400 (as Pa = 40000)

After 2nd year total amount will be = P+400+{(P+400)×a×1/100} = P+400+Pa/100+4a = P+400+400+4a=P+800+4a

Total interest = 800+4a

According to the question,

4a+800=832

4a = 2

a = 0.5

Again Pa = 40000

          P = 40000/0.5 = 80000.

So principal = 80000

rate of interest = 0.5%