Arithmetic Ability
Compound Interest

37 / 134

Q.

Find the principal if the interest compounded at the rate of 10% per annum for two years is Rs. 420 ?

View Answer

Correct choice: A

Explanation:

Given, Compound rate, R = 10% per annum Time = 2 years C.I = Rs. 420 Let P be the required principal. A = (P+C.I) Amount, A = P(1 + (r/100))n (P+C.I) = P[1 + (10/100)]2 (P+420) = P[11/10][11/10] P-1.21P = -420 0.21P = 420 Hence, P = 420/0.21 = Rs. 2000
37 / 134