Question

On what sum will the compound interest at $5$% per annum for $2$ years compounded annually be Rs. $164$?

Answer 1

Let the sum be Rs.x

We know that

$CI=A-P$

$CI=P{(1+\frac{R}{100})}^n-P$

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

$164=x[{(1+\frac{5}{100})}^2-1]$

$164=x\left[\right(1.05{)}^2-1]$

$x=\frac{164}{0.1025}$

$x=1600$

Thus, required sum is Rs.1600.