Question

The compound interest, calculate yearly, on a certain sum of money for the second year is Rs. 880 and for the third year is Rs. 968. Calculate the rate of interest and the sum of money.

Answer 1

$\because$ Difference between the C.I of two successive years$=Rs.880-968=Rs.88$

$\therefore$Rate of interest$=\frac{100\times I}{P\times T}=\frac{100\times 88}{880\times 1}=10$%

Let the sum of money=Rs.100

$\therefore$interest for one year=10% of 100$=\frac{10}{100}\times 100=Rs.10$

Amount after one year$=100+10=Rs.110$

$\therefore$Interest foe second year=10% of 110$=\frac{10}{100}\times 110=Rs.11$

When the interest for second year is rs .11 then sum=Rs.100

When the interest for second year is Rs.880 then sum$=\frac{100}{11}\times 880=Rs.8000$