Question

The difference between the interest for first and second year on a sum of money compounded annually is rs 30 if the rate of interest is 5% what was the sum of money deposited

Answer 1

$600.00

Explanation:

The difference between the interest for first and second year on a sum of money compounded annually is rs 30 if the rate of interest is 5% what was the sum of money deposited

We solve using Compound Interest formula which is given as:

First, convert R as a percent to r as a decimal

r = R/100

r = 5/100

r = 0.05 per year,

Then, solve the equation for P

P = I / ((1 + r/n)^nt - 1)

P = 30 / ((1 + 0.05/1)^(1×1) - 1)

P = 30 / ((1 + 0.05)^(1) - 1)

P = $600.00