The amount given on compound interest becomes Rs. 5000 in 2 years and Rs. 5500 in 3 years. Find the amount and interest rate.
Rs. 4132.23, 10%
The interest earned in the 3rd year alone is \(5500-5000=500\), and this equals the rate applied to the 2-year amount, so rate \(=\frac{500}{5000}\times100=10\%\). Using \(5000=P(1.1)^2\), the principal \(P=\frac{5000}{1.21}=4132.23\).
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