Question

The yearly compound interest on sum of money in one and two years are RS 1800 and RS 3816 respectively. calculate the rate of compound interest and the principal.​

Answer 1

Answer:

The rate of interest is 12 %.

Step-by-step explanation:

The yearly compound interest on sum of money in one and two years are RS 1800 and RS 3816 respectively.

$1800 = P\left ( 1+\frac{r}{100} \right )- P.... (1)\\\\3816 = P\left ( 1+\frac{r}{100} \right )^2- P.... (2)\\\\Divide (2) by (1)\\\\\frac{3816}{1800}=\frac{\left ( 1+\frac{r}{100} \right )^2-1}{\left ( 1+\frac{r}{100} \right )-1}\\\\38.16 r = 1800 (1 +0.0001 r^2 + 0.02r -1)\\\\r = 0.12 =12 percent$