Question : The compound interest on a certain sum of money for 2 years at 5% interest is Rs. 328. The sum is:
Option 1: Rs. 3000
Option 2: Rs. 3600
Option 3: Rs. 3200
Option 4: Rs. 3400
Correct Answer: Rs. 3200
Solution :
Given: Compound interest = Rs. 328
Rate = 5%
Year = 2 years
$\text{Compound interest + Principal}=\text{Principal}×(1+\frac{\text{Rate}}{100})^{\text{Time}}$
⇒ $328=\text{Principal} ((1+\frac{5}{100})^2-1) = \text{Principal}(\frac{441}{400}-1)$
⇒ $\text{Principal} = \frac{328×400}{41}$ = 3200
Hence, the correct answer is Rs. 3200.
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