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Math Help - borrowing problem

  1. #1
    Newbie
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    Sep 2008
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    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.
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  2. #2
    MHF Contributor
    Joined
    Aug 2007
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    Do you have any formulas?

    I = Prt -- for example.

    M = The Certain sum of money

    Simple

    M \cdot r \cdot 2 = 4000

    Compound

     <br />
M \cdot (1+r)^{2}-M = 4200<br />
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