Question 60

The compound interest on a certain sum of money for 2 years at 5% per annum is Rs. 102.50. Compound interest on the same sum for the same period at 4% per annum is

Solution

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According to the equation we can say that $$P\left(1+\frac{r}{100}\right)^2-P=102.50$$

Now r=5% So $$P\left(1.05\right)^2-P=102.50$$ or P(0.1025)=102.50  or P=1000

So new interest will be $$1000\left(1.04\right)^2-1000=81.6$$

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