Question

the sum of money lent at compound interest yields $100 at the end of 1 st year $105 at the end of second year . Find rate of interest per annum

Answer 1

At the end of the 1st year:

Amount = 100, Time = 1 year, principal = P.

We know that A = P(1 + r/100)^n

                      100 = P(1 + r/100)^1

                      100 = P(1 + r/100)   -------- (1).


At the end of the 2nd year:

Given Amount = 105,Time = 2 years, Principal = P

We know that A = P(1 + r/100)^n

                       105 = P(1 + r/100)^2   ------------------ (2)


On solving (1) & (2), we get

(1 + r/100) = 105/100

1 + r/100 = 1.05

100 + r = 105

r = 5%.


Therefore the rate of interest per annum = 5%.


Hope this helps!

Answer 2

Step-by-step explanation:

Top answer is

Given, Amount = Rs. 220

Principle = Rs. 200

Time = 1 year 1 year simple interest and

compound interest are equal.

So Interest = 220 - 200

= Rs. 20