Compound Interest Rate Calculation
The problem involves finding the annual compound interest rate given the amounts at the end of the first and second years.
Step-by-Step Solution
- Amount at the end of Year 1: ₹500
- Amount at the end of Year 2: ₹550
- The interest earned during the second year is the difference between the amounts at the end of Year 2 and Year 1.
Interest Earned (Year 2) = Amount (Year 2) - Amount (Year 1)
Interest Earned (Year 2) = ₹550 - ₹500 = ₹50
- This interest (₹50) was earned on the principal amount available at the beginning of the second year, which is the amount at the end of the first year (₹500).
- The rate of compound interest (R) per annum is calculated as:
$R = \frac{\text{Interest Earned}}{\text{Principal Amount}} \times 100$
$R = \frac{50}{500} \times 100$
$R = \frac{1}{10} \times 100$
$R = 10\%$
Therefore, the rate of compound interest is 10% per annum.
Similar Questions
- There is 60% increase in an amount in 6 years at simple interest. What will be the compound interest of ₹10,000 after 3 years at the same rate?
- The difference between the compound interest and the simple interest accrued, at the same rate of interest, on an amount of ₹16,000 in 2 years was ₹1,000. What was the rate of interest percent per annum?
- A deposited ₹8,000 in a bank at 8% per annum simple interest. B deposited ₹6,000 at 10% compound interest per annum. After 3 years the difference between their interest will be:
Find the interest (in ₹) on ₹8,000 at 10% per annum compounded half yearly for $1\frac{1}{2}$ years.
- Find the compound interest on ₹1,200 at 12% p.a. for 6 months compounded quarterly.
- Simple interest on a sum of money, at $5\%$ per annum for 2 years, is ₹50. The compound interest on the same sum for the same period at the same interest rate is:
- If a sum on compound interest becomes 4 times in 3 years, then with the same interest rate, the sum will become 64 times in:
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The difference between the compound interest and the simple interest on a principal sum of $₹24,000$ in $2$ years at same rate of interest is $₹60$. The rate of interest is:
Important Questions from Simple and Compound Intrest
Amit had invested same amount of sums at simple as well as compound interest, compounded annually. The time period of investment for both the sums was 2 years and rate of interest too was the same, 4% per annum. At the end, he found a difference of ₹43 in both the interests received. What were the sums (in ₹) invested?
When the difference between compound interest, compounded annually, and simple interest for three years is ₹186 at 10% interest per annum, the principal is ₹______.
- When the difference between compound interest, compounded annually, and simple interest for three years is ₹217 at 10% interest per annum, the principal is ₹______.
- When the difference between compound interest, compounded annually, and simple interest for three years is ₹228 at 4% interest per annum, the principal is ₹______.
- The difference between the compound interest, compounded annually and the simple interest if ₹17,700 is deposited at 4% rate of interest per annum for 2 years is:
