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If the amount received at the end of 2nd and 3rd year as Compound Interest on a certain Principal is Rs. 2100, and Rs. 2268 respectively, what is the rate (in %) of interest?
- A7
- B8
- C9
- D10
Answer not set
Discussion 1
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CCommunity
Let the Principle is P and interest rate is R
Amount at the end of Second year = P(1 + R/100)2 = 2100 ----(1)
Amount at the end of third year = P(1 + R/100)3 = 2268 ----(2)
Divide (2) by (1)
[P(1 + R/100)3]/ [P(1 + R/100)2] = 2268/2100
⇒ 1 + R/100 = 2268/2100
⇒ 1 + R/100 = 27/25
⇒ R = (2/25) × 100
⇒ R = 8%
∴ The rate of interest = 8%
Amount at the end of Second year = P(1 + R/100)2 = 2100 ----(1)
Amount at the end of third year = P(1 + R/100)3 = 2268 ----(2)
Divide (2) by (1)
[P(1 + R/100)3]/ [P(1 + R/100)2] = 2268/2100
⇒ 1 + R/100 = 2268/2100
⇒ 1 + R/100 = 27/25
⇒ R = (2/25) × 100
⇒ R = 8%
∴ The rate of interest = 8%