Question

At what rate of compound interest, a sum amounts to $Rs.672$ in $2$ years and to $Rs.714$ in $3$ years when the interest is payable annually?

Answer 1

Amount after 2 year $=Rs.672$
Amount after 3 years $=Rs.714$
Interest paid in the last year $=714-672=42$
Amount after second year will be the principal for the first year.

Since, it is only one year hence we can use SI.
$I=\frac{PRT}{100}$
$42=\frac{672\times R\times 1}{100}$
$R=6.25\%$