Question

Find the compound interest at the rate of $10\%$ per annum for two years on that principal which in two years at the rate of $10\%$ per annum gives Rs. 200 as simple interest.

Answer 1

Simple interest = Rs. 200
Rate (R) $=10\%$ p.a
Period (T) = 2 years
$\therefore$ Principal $=\frac{S.I\times 100}{R\times T}=\frac{200\times 100}{10\times 2}$
= Rs. 1000
Now in second case,
Principal (P) = Rs. 1000
Rate (R) $=10\%$ p.a
Period (T) = 2 years
$\therefore$ Interest for the first year $=\frac{PRT}{100}$
$=Rs.\frac{1000\times 10\times 1}{100}=Rs.100$
Amount after one year
= Rs. 1000 + Rs. 100 = Rs. 1100
Or principal for the second year = Rs. 1100
Interest for the second year $=\frac{1100\times 10\times 1}{100}$
= Rs. 110
$\therefore$ Total interest for two years
= Rs. 100 + Rs. 110 = Rs. 210