A certain sum of money lent at compound interest becomes Rs 7396 in two years and Rs 7950.70 in three years. Find the rate of interest and the sum of money.

Dear Student,
Here is the solution of your asked query:

Let P be the principal and R be the rate of interest.Amount, A = P1 + R100nWhen Amount is Rs 7396 and Timen is 2 yrs, then7396 = P 1 + R1002      .........1When Amount is Rs 7950.70 and Timen is 3 yrs, then7950.70 = P 1 + R1003      .........2Dividing 1 by 2, we get7950.707396 = 1 + R100R100 = 7950.707396 - 1R100 = 554.77396R = 554707396=7.5So, Rate = 7.5% p.a.Putting the value of R in (i) we get;7396 = P 1 + R1002  7396=P1 + 7.510027396=P1 + 1520027396=P×215200×215200P=7396×200×200215×215 = 6400
Therefore sum of money is Rs.6400

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