Question

Q. Find the principal when C.I for 2 years at the rate of 4% p.a, interest compounded annually is Rs. 102.

Answer 1

$$\begin{gathered} \mathrm{Hi}, \\ \mathrm{Here}\mathrm{CI}=102 \\ \mathrm{So}\mathrm{A}-\mathrm{P}\hspace{0.17em}=102....\left(1\right) \\ \mathrm{t}=2\mathrm{years} \\ \mathrm{r}=4\% \\ \mathrm{So}\mathrm{A}=\mathrm{P}\hspace{0.17em}{\left(1+\frac{\mathrm{r}}{100}\right)}^{\mathrm{t}} \\ \mathrm{A}=\mathrm{P}{\left(1+\frac{4}{100}\right)}^2=\mathrm{P}\times \frac{26}{25}\times \frac{26}{25} \\ \mathrm{From}\mathrm{equation}1 \\ \mathrm{A}=\mathrm{P}+102 \\ \mathrm{P}+102=\mathrm{P}\times \frac{26}{25}\times \frac{26}{25} \\ \mathrm{P}\left(\frac{26}{25}\times \frac{26}{25}-1\right)=102 \\ \mathrm{P}=\frac{102}{\frac{676}{625}-1}=\mathrm{Rs}.1250 \end{gathered}$$