Question

On a certain sum, C.I. is Rs 41 and SI is Rs 40. for 2 years. What is the rate p.a

Answer 1

Supposing that Rs is rupees, CI is compound interest over two years, SI is simple interest in two years, and p.a. means per annum,
1 rupee interest was earned on the first year's interest, during the second year.

Let S be the original invested sum and r be the annual rate.

S*r = 20
S*r^2 = 1
r = 1/20 = 5%
S = 20 Rs

Answer 2

How 20 came

Answer 3

You are right.I made a mistake in the last step
S*r = S*0.05 = 20
S = 400 Rs

Answer 4

Plse do it again,
u have really confuse me

Answer 5

I would do it the same up to and including
r = 1/20 = 5%
After that, I made a mistake which you pointed out. The derivation should finish with
S*r = S*0.05 = 20
S = 400 Rs

The first year's interest earned is $20. If that is compounded in the second year, the interest earned in the second year is 0.05*(420) = 21, for a two-year total of 41, as required.

In the simple interest (SI) case, you just earn $20 a year in interest, indefinitely. Unless the interest is withdrawn annually, and reinvested or put to good use, this is not a good way to save money.

Answer 6

if r is to be calculated , then how u can directly say r = .05%