Q. The Compound interest of certain for first and Second year is Rs. 20 and Rs. 23 respectively. Find the rate of interest in P.C.P.A.
Step 1: Identify the compound interest for the first year (CI1) and the second year (CI2).
CI1=Rs.20
CI2=Rs.23
Step 2: Calculate the additional interest earned in the second year. This additional interest is the interest earned on the first year's interest.
AdditionalInterest=CI2−CI1=23−20=Rs.3
Step 3: Consider the first year's compound interest (CI1) as the principal for calculating the additional interest. The time period for this additional interest is 1 year.
Principal (P) = Rs. 20
Interest (I) = Rs. 3
Time (T) = 1 year
Step 4: Use the simple interest formula I=100P×R×T to find the rate of interest (R).
3=10020×R×1
Step 5: Solve for R.
3=10020R
3=5R
Multiply both sides by 5:
R=3×5
R=15
The rate of interest is 15% per annum.
The final answer is 15%P.C.P.A..
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