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Mathematics

What sum will amount to ₹2782.50 in 2 years at compound interest, if the rates are 5% and 6% for the successive years?

Compound Interest

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Answer

If the rates are different then formula is,

A=P(1+r1100)(1+r2100)A = P\Big(1 + \dfrac{r1}{100}\Big)\Big(1 + \dfrac{r2}{100}\Big)

Substituting values we get,

A=P(1+5100)(1+6100)2782.50=P(1+120)(1+350)2782.50=P×2120×5350P=2782.50×20×5021×53P=2500.A = P\Big(1 + \dfrac{5}{100}\Big)\Big(1 + \dfrac{6}{100}\Big) \\[1em] \Rightarrow 2782.50 = P\Big(1 + \dfrac{1}{20}\Big)\Big(1 + \dfrac{3}{50}\Big) \\[1em] \Rightarrow 2782.50 = P \times \dfrac{21}{20} \times \dfrac{53}{50} \\[1em] \Rightarrow P = \dfrac{2782.50 \times 20 \times 50}{21 \times 53} \\[1em] \Rightarrow P = ₹2500.

Hence, sum = ₹2500.

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