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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.


Solution

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 $$=\dfrac{100\times I}{P\times T}\\ $$

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

                                       $$=\dfrac{100}{11}$$

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

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

Mathematics

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