Based on part 1 we will solve some problems in compound interest.

**Problem 1:** Find the principle and compound interest if the rate of interest is 10% and time is 2years and amount is 2420?

Solution:

R=10%

Time =2 years

Amount=2420

Principle=?

C.I=?

The fraction of 10% is

10 11

10 11

10*10=100

11*11-121

Let 100 as a principle

121 as amount

121-100=21 is C.I

121———>2420

100———->?

121———->2420

21————–>?

Principle =2000 and C.I=420

**Problem 2:** P=?, T=2 years,=%, %,CI=480

Solution :

Convert % into fraction i.e

Convert % into fraction i.e

9 10

8 9

Cancel the common term 9 and the result is 8 and 10

Here 4 is the principle and 5 is the amount

4-5=1 is C.I

1———->480

4———–> ?

is the principle.