Question

Find the principal of the interest compounded annually at the rate of $10\%$ for two years is Rs. 210.

Answer 1

Let principal (P) = Rs. 100
Rate (R) $=10\%$ p.a
Period (n) = 2 years
$\therefore$ C.I $=P[{(1+\frac{R}{100})}^n-1]$
$=Rs.100[{(1+\frac{10}{100})}^2-1]$
$=Rs.100[{\left(\frac{11}{10}\right)}^2-1]=Rs.100[\frac{121}{100}-1]$
$=Rs.100\left(\frac{121-100}{100}\right)=Rs.21$
If C.I is Rs. 21, then principal = Rs. 100
If C.I is Re. 1, then principal $=Rs.\frac{100}{21}$
and if C.I is RS. 210, then principal
$=Rs.\frac{100}{21}\times 210=Rs.1000$