Here, we want to find the interest rate and principal
The interest rate, r = 6% and the principal, P = Rs 65,000
Compound interest:
A = P(1 + r/n)^t
Simple interest :
I = P * r * t
Simple interest for 2 years = Rs 7800
Simple interest for 1 year = Rs 7800 / 2
= Rs 3900
Compound interest for 2 years = Rs 8034
Compound interest for the second year = Rs 8034 - Rs 3900
= Rs 4134
Interest on Rs 3900 = Rs 4134 - Rs 3900
= Rs 234
Therefore,
Interest rate, r = 234/3900 × 100
= 0.06 × 100
r = 6%
Recall,
Simple interest :
I = P * r * t
Then,
P = I / r * t
= 3900 / 6% * 1
= 3900 / 0.06
= 65,000
P = Rs 65,000
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