Question

On a certain sum, Compound interest is Rs41 and Simple interest is Rs 40. for 2 years. What is the rate p.a.?

Answer 1

Initial sum = S
Interest rate = r
S*2r = 40
S*r + S*(1+r)*r = 41
S*2r + S*r^2 = 41
S*r^2 = 1
2/r = 40
r = 1/20 = 5% is the rate per annum.
S = 400 is the initial sum (rupees)

Answer 2

Thank you drwls ,