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?
None of these
Interest in 2nd year = 1980 Rs.
Interest in 3rd year = 2178 Rs.
Difference = 2178 -1980
Rate of interest = (198/1980) x 100 = 10 %
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 = (1980/11) x 10 = 180 x 10 = 1800 Rs.