Question

On what sum of money will the compound interest for 2 years at 5 per cent per annual amount to Rs.768.75?

Answer 1

We have,

Amount $A=Rs768.75$

Principal value $=?$

Rate $=r=5$

Time $n=2year$

So,

Using formula

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

$768.75=P{(1+\frac{5}{100})}^2$

$768.75=P{(1+\frac{1}{20})}^2$

$768.75=P{\left(\frac{21}{20}\right)}^2$

$P=768.75\times \frac{20}{21}\times \frac{20}{21}$

$P=Rs697.2$

Hence, this is the answer.