# borrowing problem

• Sep 11th 2008, 07:37 AM
Mr.Green
borrowing problem
X borrowed a certain sum from Y at a certain rate of simple interest for 2years. He lent this sum to Z at the same rate of interest compounded annually for the same period. At the end of two years he received $4200 as compound interest but paid$4000 only as simple interest. Find the sum and rate of interest.
• Sep 11th 2008, 08:34 AM
TKHunny
Do you have any formulas?

I = Prt -- for example.

M = The Certain sum of money

Simple

$M \cdot r \cdot 2 = 4000$

Compound

$
M \cdot (1+r)^{2}-M = 4200
$