The compound interest on a certain sum of money borrowed at the rate of 20% per annum for 2 years is ₹ 440. Find the original amount borrowed.

₹ 1000

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₹ 2000

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₹ 500

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₹ 300

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Solution

The correct option is A ₹ 1000
Given
Compound interest = ₹ 440
Time period (n) = 2 years
Interest rate (r) = 20%

By using formula for Compound interest, we can write

$C . I . = P [{(1 + \frac{r}{100})}^{n} - 1]$

$₹ 440 = P [{(1 + \frac{20}{100})}^{2} - 1]$

Or, $P = ₹ \frac{440 \times 100}{44} = ₹ 1000$

Hence, the amount borrowed is ₹ 1000

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The compound interest on a certain sum of money borrowed at the rate of 20% per annum for 2 years is ₹ 440. Find the original amount borrowed.

The correct option is A ₹ 1000Given Compound interest = ₹ 440 Time period (n) = 2 years Interest rate (r) = 20% By using formula for Compound interest, we can write C.I.=P[(1+r100)n−1] ₹ 440=P[(1+20100)2−1] Or, P=₹ 440×10044=₹ 1000 Hence, the amount borrowed is ₹ 1000