Given: Simple interest of two years = Rs.1800 Compound Interest of three years = Rs.1881 Formula Used: Compound Interest – Simple Interest for 2 years = simple interest × (Rate/200) Calculation:(Compound Interest – Simple Interest) for 2 years = 1800 × (rate %/200) ⇒ 81 = 1800 × (rate %/200) ⇒ 81 × 200/1800 = rate % ∴ Rate % p.a. = 9 % Alternate Method Simple interest for 2 years = 1800 ⇒ SI for 1 year = SI for 2nd year = 1800/2 = 900 Difference in CI and SI = 1881 - 1800 = 81 (This difference is due to interest on 1st year interest) ∴ Rate = (81/900) × 100 = 9%