Find the compound interest at the rate of 10% per annum for two years on thatprincipal, which in two years at the rate of 10% per annum given Rs 200 as simpleinterest.
Question
Find the compound interest at the rate of 10% per annum for two years on thatprincipal, which in two years at the rate of 10% per annum given Rs 200 as simpleinterest.
Solution
To solve this problem, we first need to find the principal amount. We know that the formula for simple interest is:
I = PRT/100
Where: I = Interest P = Principal amount R = Rate of interest T = Time period
Given in the problem, I = Rs 200, R = 10% per annum, and T = 2 years. We can substitute these values into the formula and solve for P:
200 = P * 10 * 2 / 100 200 = P * 20 / 100 200 = P * 0.2 P = 200 / 0.2 P = Rs 1000
Now that we have the principal amount, we can find the compound interest. The formula for compound interest is:
A = P (1 + R/100)^T
Where: A = the total amount after interest P = Principal amount R = Rate of interest T = Time period
Substituting the values we have:
A = 1000 (1 + 10/100)^2 A = 1000 (1.1)^2 A = 1000 * 1.21 A = Rs 1210
The compound interest is then A - P, which is Rs 1210 - Rs 1000 = Rs 210.
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