Question

A sum of money is invested at compound interest payable annually. The interest in two successive years is Rs. 275 and Rs. 300. Find the rate of interest.

Answer 1

Given that,

Interest at the end of $1^{st}$ year $=Rs.275$

Interest at the end of $2^{nd}$ years $=Rs.300$

$\therefore$ Interest for $1$ year $=300-275=Rs.25$

This interest will be on $Rs.275$

Hence, rate of interest $=\frac{100\times I}{P\times T}$

$=\frac{100\times 25}{275\times 1}$

$=\frac{100}{11}$

$=9\frac{1}{11}$

Thus, the required rate of interest is $9\frac{1}{11}\%$.