Question

A sum of money invested at compound interest of $8\%$ compounded annually amounted to $\text{Rs.}7290$ in $2$ years. Find the sum invested.

Answer 1

Let $P$ be the principal.

As we know that, compound interest is given as-

$A=P{(1+\frac{r}{100})}^n$

Here,

Amount, $A=\text{Rs.}7290$

$P=$ Principal

Rate of interest, $r=8\%$

Time period, $n=2\text{years}$

Therefore,

$\begin{array}{cc}7290& =P{\left(1+\frac{8}{100}\right)}^2\\ 7290& =P{\left(\frac{27}{25}\right)}^2\\ P& =7290\times {\left(\frac{25}{27}\right)}^2\\ & =\text{Rs.}6250\end{array}$

Thus the sum invested is $\text{Rs.}6250$.