Using binomial theorem,

Where binomial co-efficients form row of pascal triangle.

Powers of 1.1 Powers of 1.01 Binomial Co-efficients

(Visualize as a group of 2 from
right side)
1st 1.1 1.01 11
2nd 1.21 1.0201 121
3rd 1.331 1.030301 1331
4th 1.4641 1.04060401 14641
5th 1.61051 – be careful 1.0510100501 1 5 10 10 5 1
( 1.1) = ( 1 + 0.1) = 1 + 4 ( 0.1) + 6 ( 0.1) + 4 ( 0.1) + ( 0.1) = 1.4641
4 4 2 3 4

( 1.01) = ( 1 + 0.01)
5 5

= 1 + 5 ( 0.01) + 10 ( 0.01) + 10 ( 0.01) + 5 ( 0.01) + ( 0.01)

2 3 4 5

= 1.0510100501
For 5th power of 1.1 consider 5th row of Pascal triangle 1 5 10 10 5 1. If forward carry to higher place (i.e
from right to left) it will become 1 6 1 0 5 1. Hence (1.1)^5 = 1.61051

Powers of 1.02 Powers of 1.03 Powers of 1.04 Powers of 1.05

1st 1.02 1.03 1.04 1.05
2nd 1.0404 1.0609 1.0816 – be careful 1.1025
3rd 1.061208 1.092727 1.124864 1.157625 – be careful
( 1.02 ) = ( 1 + 0.02 ) = 1 + 3 ( 0.02 ) + 3 ( 0.02 ) + ( 0.02 )
3 3 2 3

= 1 + 6 ( 0.01) + 12 ( 0.0001) + 8(0.000001) = 1.061208 (1+n)^3=1+3n+3n^2+n^3

Simply 1x2^0=01 then 3x2=06 then 3x2^2=12 then 1x2^3=08  01.061208

For (1.04)^3

01 then 3x4=12 then 3x4^2=48 then 1x4^3=64  01.124864

For (1.05)^3

01 then 3x5=15 then 3x5^2=75 then 1x5^3=125  01.1575(125)  01.157625 – forwarding carry
 Powers of 1.06 Powers of 1.07 Powers of 1.08 Powers of 1.09
1st 1.06 1.07 1.08 1.09
2nd 1.1236 1.1449 1.1664 1.1881
3rd 1.191016 1.225043 1.259712 1.295029

If difference of 2-yearly simple and compound interest at same rate is 10% of 3-yearly simple interest at
that rate then interest rate = _______