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Question : Compound interest on a certain sum of money invested for 1.5 years at the rate of 10% per annum, compounded half-yearly is INR 5,044. What is the sum?

Option 1: INR 32,000

Option 2: INR 37,044

Option 3: INR 33,000

Option 4: INR 22,000


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 11th Jan, 2024

Correct Answer: INR 32,000


Solution : Given:
Amount, $\mathrm{A = 5044}$
Rate of interest, $\mathrm{r = \frac{10}{2}=5}$% half yearly
Period of compounding, $\mathrm{n = 2}$
Time, $\mathrm{t = 1.5}$ years
Let the principal be $P$.
We know that,
$\mathrm{A = P \left(1 + \frac{r}{n}\right)^{nt} - P}$
$⇒\mathrm{5044 = P \left(1 + \frac{5}{100}\right)^{2 \times 1.5} - P}$
$⇒\mathrm{5044 = P (\frac{21}{20})^{3} - P}$
$⇒\mathrm{\frac{1261P}{8000}=5044}$
$⇒\mathrm{P =32000}$
Hence, the correct answer is INR 32,000.

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