Question:
Find the compound interest at the rate of 10% per annum for two years on that principal which in two years at the rate of 10% per annum gives Rs 200 as simple interest.
Solution:
$\mathrm{SI}=\frac{\mathrm{PRT}}{100}$
$\therefore \mathrm{P}=\frac{\mathrm{SI} \times 100}{\mathrm{RT}}$
$=\frac{200 \times 100}{10 \times 2}$
$=\mathrm{RS} 1,000$
$\mathrm{~A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$=1,000\left(1+\frac{10}{100}\right)^{2}$
$=1,000(1.10)^{2}$
$=\mathrm{Rs} 1,210$
Now,
$\mathrm{CI}=\mathrm{A}-\mathrm{P}$
$=\mathrm{Rs} 1,210-\mathrm{R} s 1,000$
$=\mathrm{Rs} 210$