Compound interests Compound interest for 2 years and 3 years on certain principal at certain rate of interest are 8820rs and 9261 rs respectively. Find rate of interest and principal

Question

Compound interest for 2 years and 3 years on certain principal at certain rate of interest are 8820rs and 9261 rs respectively. Find rate of interest and principal

Answer 1

8820 =P(1+r)^2

9261=P(1+r)^3

divide

9261/8820= 1+r

r= 9261/8820 -1 = 441/8820= 1/20=.05 = 5% interest rate if componded annually

8820 =P(1.05^2)

P=8820/1.1025= exactly 8,000 rs= principal