So you say, SI is 600 for two years.
That clearly means that SI for 1st year is 300 and 2nd year is also 300.(Since SI remains same for every year)
Then comes the CI.
Total CI is 660. We know in the first year of investment SI=CI.(Check, its true)
so that means CI for first year will also be 300. which concludes that 360 is the CI for second year.
Now focus on 2nd year,
CI earned rs.60 more than SI.
how did it earn it? these rs.60 came from interest applied on the interest of 1st year itself. (hence this was not included in SI)
hence, we can calculate the rate of interest as follows:
CI-SI. 60. x100
---------. =------. =20%
what we did was, we knew that these rs.60 is earned from rs.300. As a result we made a fraction and calculated its percentage.
Now that we know the percentage of interest, this is the same percentage of interest by which we would have earned rs.300 in the first year through SI/CI (either method).
hence you can reverse calculate the principal to come out as 300x5=1500.
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