Question

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

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Solution

## Let principal (P) = Rs. 100 Rate (R) =10% p.a Period (n) = 2 years ∴ C.I =P[(1+R100)n−1] =Rs.100[(1+10100)2−1] =Rs.100[(1110)2−1]=Rs.100[121100−1] =Rs.100(121−100100)=Rs.21 If C.I is Rs. 21, then principal = Rs. 100 If C.I is Re. 1, then principal =Rs.10021 and if C.I is RS. 210, then principal =Rs.10021×210=Rs.1000

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