Question

What sum of money will amount Rs.3645 in 3 years at $12\frac{1}{2}$% per annum compound interest?

Answer 1

Suppose the sum of money $=Rs.100$

Rate$=12\frac{1}{2}\%$ p.a,

Time $=3$ years

$\therefore Amount=Rs.100(1+\frac{12\frac{1}{2}}{100}{)}^3=Rs.100(1+\frac{25}{200}{)}^3$

$=Rs.100(1+\frac{1}{8}{)}^3=Rs.100(\frac{9}{8}{)}^3$

$=Rs.100\times \frac{9}{8}\times \frac{9}{8}\times \frac{9}{8}=Rs.\frac{18225}{128}$

If the amount is $Rs.\frac{18225}{128}$ then the principal $=Rs.100$

If the amount is $Re.1$, then the prinicipal$=Rs.\frac{100\times 128}{18225}$

If the amount is $Rs.3645,$ then the prinicpal$=Rs.\frac{100\times 128}{18225}\times 3645=Rs.2560$