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
- If the interest earned during the $2^{\text{nd}}$ year on a certain sum is ₹6,258, and the rate of interest is 20% per annum compounded annually, then the sum is:
- The difference between compound interest and simple interest, at the same rate, on an amount of ₹15,000 for 2 years is ₹24. What is the rate of interest per annum?
- 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?
- 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:
Find the interest (in ₹) on ₹8,000 at 10% per annum compounded half yearly for $1\frac{1}{2}$ years.
- 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?
- Find the compound interest on ₹1,200 at 12% p.a. for 6 months compounded quarterly.
- 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:
- 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:
- If the difference between the compound interest and the simple interest on a certain sum of money at 8 % p.a. for 2 years is ₹240, then the sum of money is:
Important Questions from Simple and Compound Intrest
- The difference between the simple interest and the compound interest, compounded annually, on a certain sum of money for 2 years at 16% per annum is ₹797. Find the sum (rounded off to the nearest integer).
- 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:
- The difference between the simple interest and the compound interest, compounded annually, on a certain sum of money for 2 years at 10% per annum is $₹407$. Find the sum [rounded off to the nearest integer].
The difference between the simple interest and the compound interest, compounded annually, on a certain sum of money for 2 years at 17% per annum is ₹967. Find the sum [rounded off to the nearest integer].
- When the difference between compound interest, compounded annually, and simple interest for three years is ₹217 at 10% interest per annum, the principal is ₹______.
