A sum of money put out at compound interest amounts to Rs. 16900 in 2 years and to Rs. 17576 in 3 years. Find the rate of interest per annum.
Let x be the principal amount and r be the compound interest.
The amount after first year =$$x + xr$$
the amount after second year=$$(x + xr) +(xr + xr^{2})=x+2xr + xr^{2}=x(1+r)^{2} $$=16900 -(1)
Similarly, the amount after third year =$$x(1 + r)^{3}$$= 17576 -(2)
dividing 2 by 1 we get,
1+r=1.04
r=.04
Thus the interest is 4%.
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