Question

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

• A. Rs. 2000
• B. Rs. 2200
• C. Rs. 1000
• D. Rs. 1100

Answer 1

The correct option is A Rs. 2000

P = ?, CI = Rs. 420, R = 10%, T = 2 years

$CI=P{[1+\frac{R}{100}]}^T-P$

$420=P[{(1+\frac{10}{100})}^2-1]$

$=P\left[\frac{21}{100}\right]$

$\therefore P=\frac{420\times 100}{21}=Rs.2000$