Question

A certain sum amounts to Rs. $1331$ in $1\frac{1}{2}$ years at $20\%$ p.a. compound interest compounded half yearly. Determine the sum.

• A. Rs. $990$
• B. Rs. $1050$
• C. Rs. $1000$
• D. Rs. $1250$

Answer 1

Answer: (C)

Rs. $1000$

Amount = Rs 1331
Time = 3/2 = 3 half years
Rate per annum = 20% = 10%
A = P( 1 + r/100 )^n
1331 = P ( 1 + 10/100 )^3
1331 = P( 110/100)^3
1331 × 100/110 × 100/110 × 100/110 = P
1000 Rs = Principle