# A certain loan amounts, under compound interest, compounded annually earns an interest of Rs.1980 in the second year and Rs.2178 in the third year. How much interest did it earn in the first year?   Option 1)   Rs.1600   Option 2)   Rs.1800   Option 3)   Rs.2100   Option 4)   None of these   Option 5)   Rs.1900

Interest in 2nd year = 1980 Rs.

Interest in 3rd year = 2178 Rs.

Difference$= 2178 -1980$

$198$

Rate of interest$=\left ( \frac{198}{1980} \right )\times 100=10\: ^{0}/_{0}$

If the rate of rate of interest is 10 % compounded annually then the interest in second year is 11 %

It means 1980 is 11% and we have to calculate first year i.e we have to calculate 10 %  of p

Interest of 1st year $= \frac{1980}{11} \times 10 = 180 \times 10 = 1800 Rs.$

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