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Mohan invested a certain sum at compound interest, compounded annually. If the interests for two successive years were Rs 600 and Rs 648, calculate the rate of interest and the sum invested. - Mathematics

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Question

Mohan invested a certain sum at compound interest, compounded annually. If the interests for two successive years were Rs 600 and Rs 648, calculate the rate of interest and the sum invested.

Sum
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Solution

For the second year: 

A=Rs 648 ; P=Rs 600 ; n=1 ; r = ?

`therefore  "A" = "P" (1 + "r"/100)^"n"`

`⇒  648 = 600 (1 + "r"/100)^1`

⇒  648 = 600 + 6r 

⇒ 6r = 48

⇒ r = 8 

Hence, rate of interest = 8 % 

For the first year: 

I=Rs 600 ; r=8 % ; n=1 ; P = ? 

`"I" =("P" xx "r" xx "n")/100` 

Rs 600 = Rs `("P" xx 8 xx 1)/100`

P = Rs `60000/8`

P = Rs 7,500

The sum invested= Rs 7,500.  

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Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal
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Chapter 1: Compound Interest - Exercise 1.4 [Page 12]

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Frank Mathematics - Part 2 [English] Class 10 ICSE
Chapter 1 Compound Interest
Exercise 1.4 | Q 1 | Page 12
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