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Question : A sum of Rs. 2420 is accumulated in 2 years at 10% Compound Interest on a certain amount. Then the original amount is:

Option 1: Rs. 1000

Option 2: Rs. 2000

Option 3: Rs. 1500

Option 4: Rs. 2500


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: Rs. 2000


Solution : Total amount = Rs. 2420
Rate, $R$ = 10%
Time, $n$ = 2
Let $P$ be the sum.
Total amount = $P(1+\frac{R}{100})^{n}$ where $P$ is principal, $R$ is the rate of interest per annum compounded annually and $n$ is time in years.
⇒ 2420 = $P(1+\frac{10}{100})^{2}$
⇒ $P×(1.1)^{2}$ = 2420
⇒ $P$ = $\frac{2420}{1.21}$ = 2000
Hence, the correct answer is Rs. 2000.

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