Question

The compound interest, calculated yearly, on a certain sum of money for the second year is Rs.1,089 and for the third year it is Rs. 1,197.90. Calculate the rate of interest and the sum of money.

Answer 1

(i)C.I. for second year = Rs1,089

C.I. for third year = Rs 1,197.90

Difference between the C.I. of two successive years

= Rs1,197.90 - Rs1089= Rs108.90

Rs108.90 is the interest of one year on Rs1089

Rate of interest= Rs%= %= 10%

(ii) Let the sum of money= Rs100

Interest on it for 1^st year= 10% of Rs100= Rs10

Amount in one year= Rs100+ Rs10= Rs110

Similarly, C.I. for 2^nd year= 10% of Rs110

= Rs11

When C.I. for 2^nd year is Rs11, sum = Rs100

When C.I. for 2^nd year is Rs1089, sum = Rs = Rs9,900