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25 Nov 2018, 06:32
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45% (medium)

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70% (02:18) correct 30% (02:55) wrong based on 32 sessions

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The simple interest for 10 yrs is 6000$. Compound interest for 2 yrs is$1400 . What is the rate percentage and principal.

A. 33.33% , 1600
B. 30%. , 1800
C. 33.33% , 1800
D. 66.66% , 1600
E. 66.66% , 1800

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The simple interest for 10 yrs is 6000$. Compound interest [#permalink] ### Show Tags 25 Nov 2018, 08:19 2 For questions pertaining to simple interest and compound interest, these are a few concepts that come in handy 1. Simple interest is the exact same amount for all the years. 2. Compound interest = Simple interest(for first year) 3. Compound interest - Simple interest(for the first two years) = Interest on the interest for the 1st year. Now, coming back to the problem in hand If SI is 6000$ for 10 years, the simple interest for one year is $$\frac{6000}{10} = 600$$

Compound interest(2nd year) $600*2 + Interest on$600 = $1400 -> Interest on$600 = $200 We can calculate the rate of interest as $$\frac{200}{600}*100 = 33\frac{1}{3}$$%. Now, as$600 is the interest for
the first year and we have found rate of interest to be $$33\frac{1}{3}$$%, the principal is $$600*3 = 1800$$.

Therefore, the interest rate and the prinicpal are $$33\frac{1}{3}%$$ and $$1800$$(Option C) respectively
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