Answer:
The rate of interest is 20% and the sum is $3,750
Explanation:
In order to calculate the sum and rate of interest we would have to make the following calculation:
rate of interest= (sum in 4 years-sum in 3 years)*100/sum in 3 years*1
According to the given data we have the following:
sum in 4 years=$7,776
sum in 3 years=$6,480
Therefore, sum in 4 years-sum in 3 years=$7,776-$6,480=$1,296
Therefore, rate of interest=$1,296*100/$6,480*1
rate of interest=20%
To calculate the sum we would have to make the following calculation:
FV=PV(1+20%)∧3
$6,480=PV(1,20)∧3
PV=$3,750
Sum is $3,750