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What is the rate of interest, if simple interest earned on a certain sum for the 3rd year is Rs. 1,750 and compound interest earned for 2 years is Rs. 3622.5?1). 82). 93). 104). 7 |
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Answer» Simple interest for 3rd year, the duration is only 1 year Let the rate of interest be 100r ⇒ Simple interest = (PRINCIPAL × rate × 1)/100 ⇒ 1750 = Principal × r----(1) Also, ⇒ Compound interest = Principal × [(1 + Rate/100)TIME - 1] ⇒ 3622.5 = Principal × [(1 + r)2 - 1] ⇒ 3622.5 = Principal × [r2 + 2r] ⇒ 3622.5 = Principal × r × (r + 2)----(2) Dividing equation (2) by (1), we GET, ⇒ 3622.5/1750 = r + 2 ⇒ r = 0.07 ∴ Rate = 100r = 7% |
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