Question

The interest charged on the certain sum is Rs. 720 for one year and Rs. 1,497.60 for two years. Find, whether the interest is simple or compound. Also, calculate the rate per cent and the sum.

Answer 1

Interest for 1 year=Rs.720

Interest for 2 years=Rs.1497.60

$\therefore$ Interest for 2nd year=$1497.60-720=Rs.777.60$

As the interst is not same for two years, it is compund interest not simple interest.

Difference between C.I of two successive years$=777.60-720=Rs.57.60$

$\therefore$Rate of interest$=\frac{57.60\times 100}{720\times 1}=8$%

Let the sum be Rs.100

$\therefore$Interest on it for 1st year=8% of 100=$\frac{8}{100}\times 100=Rs.8$

If the interest for one year is Rs 8 then sum=Rs.100

If the interest for one year is 720 then sum$=\frac{100}{8}\times 720=Rs.9000$