Multiple choice

A sum of money in 2 years at compound interest becomes Rs. 3630 and in 3 years, it becomes Rs. 3993. Find the principal.

  1. Rs. 2500

  2. Rs. 2800

  3. Rs. 3000

  4. Rs. 3200
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P(1+r)^n. 3630 = P(1+r)^2. 3993 = P(1+r)^3. Dividing the two: (1+r) = 3993 / 3630 = 1.1. So r = 10%. P = 3630 / (1.1^2) = 3630 / 1.21 = 3000.

AI explanation

Dividing the amount after 3 years by the amount after 2 years gives the compound interest growth factor for one year, so 3993 divided by 3630 equals 1.1, meaning the rate is 10%. To find the principal, divide the amount at 2 years by the growth factor squared, which is 3630 divided by 1.21. This calculation gives the principal of Rs. 3000.

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